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HGGC Thrived in Transition to Reap PRIVATE EQUITY FIRM OF THE YEAR

The firm raised a new fund and closed a slew of deals with a revamped management team that includes CEO Rich Lawson, former 49ers QB Steve Young and former Bain exec Greg Benson

Closing an impressive nine acquisitions and one exit in 2014, tech-focused private equity firm HGGC also raised a successful new fund and proved its enduring vitality, despite a change in leadership and a new company name.

The Palo Alto, California firm was founded in 2007 as Huntsman Gay Global Capital. While eponymous investor Jon Huntsman Sr. still serves as chairman of the firm's $1.1 billion inaugural fund (which closed in 2009), he was never involved in managing the firm, due to his day job as chairman of chemical maker Huntsman Corp. (NYSE: HUN). Robert Gay served as the firm's CEO until his departure in 2012 to take a leadership position in the Church of Jesus Christ of Latter-Day Saints. The firm changed its name to HGGC in 2013 and began raising the new fund in January 2014. (Neither Huntsman nor Gay were involved in the second fund.)

Today, HGGC is led by a quartet that includes three of the original founders: Rich Lawson, who serves as CEO and previously co-founded Sorenson Capital and led a Bain Capital-backed e-commerce company; former San Francisco 49ers quarterback Steve Young; and former Bain Capital executive Greg Benson. Also on HGGC's management team is Gary Crittenden, former chief financial officer of Citigroup Inc. (NYSE: C), who joined the firm in 2009. Proving the team's prowess, HGGC has already returned $1.2 billion to investors from the inaugural fund, which still has investments to sell.

"We were delighted by the support of both existing and new investors in our latest private equity fund," CEO Rich Lawson tells Mergers & Acquisitions. "We believe it was a seamless transition from Huntsman Gay Global Capital to HGGC, as we had everyone's collective support."

The firm began raising HGGC Fund II LP in January 2014 and announced a first close of about $500 million in April to support acquisitions. HGGC announced a second close of around $1 billion in December and the final close of $1.33 billion in March 2015.

"We stepped up and are the largest collective investor across our funds," Lawson says. HGGC invested $80 million in Fund II. The firm plans to make 10 platform investments from the fund and has already completed four: AutoAlert, which provides cloud-based data and analytics services to the automotive market; Pearl Holding Group, an insurance-services company; Serena Software, an information technology business; and Survey Sampling International, which provides data and technology services for consumer and business-to-business research.

HGGC made five add-on acquisitions to portfolio companies and sold Hollander Sleep Products, a manufacturer of pillows and comforters, to Sentinel Capital Partners, for an undisclosed price. As the private equity industry matures, succession plans will prove crucial for many firms. "To ensure an orderly transition, make sure you have a true partnership approach to your organization," Lawson says.