Gryphon earns 5x on sale to Leeds Weld

In its third exit in two months, San Francisco-based Gryphon Investors, along with Crosslink Capital, has sold sales training provider Miller Heiman to private equity firm Leeds Weld, generating a return of more than 5x its initial investment.

San Francisco-based private equity firm Gryphon Investors has sold its portfolio company, Miller Heiman, a sales force training company, to Leeds Weld, a New York-based private equity firm focused on the education and training industries.

CIT and General Electric Pension Trust provided debt financing for the transaction.

Bill Weld, principal, Leeds Weld

Although terms of the deal were not disclosed, Gryphon partner Nick Orum noted in a statement that the private equity firm had realized more than five times its original investment in the company, a return that included a recapitalization of the company in 2003. Gryphon first acquired Miller Heiman in 1998, in conjunction with San Francisco venture capital firm Crosslink Capital, reportedly putting a combined $14 million (€11.4 million) of equity into the transaction.

The exit of Miller Heiman represents Gryphon’s third exit in the past two months. In late April, the firm sold Bright Now Dental, a company it first acquired in 1998 with $10 million of equity, to Los Angeles-based private equity firm Freeman Spogli for $340 million. Earlier that month, Gryphon sold El Paso-based MSD Ignition to the company’s management and ValueAct Capital Partners, a San Francisco-based hedge fund, for $141 million, just one year after it purchased the business with approximately $30 million in equity – the transaction yielded a cash return of 2.5 times Gryphon’s investment and an IRR of around 175 percent, according to a statement released by the company.

Gryphon is a middle market private equity firm founded in 1995 by David Andrews, formerly managing director at Oak Hill Partners. The firm typically invests between $25 million and $75 million in companies in the business services, retail, industry and technology sectors. Gryphon is currently raising capital for Gryphon Partners III, which is reportedly targeting $600 million. Its previous fund closed on approximately $420 million in 1999.

Founded in 1993 by Jeffrey Leeds and Robert Bernstein, Leeds Weld employs a number of well known political figures, including former Massachusetts governor William Weld as a principal and past New York City mayor Rudolph Giuliani as an advisor. In 2002, the firm launched fundraising for its fourth fund, Leeds Weld Equity Partners IV, with a $500 million target.