Audax Private Equity, a division of Audax Group, has completed its 500th transaction, a small add-on deal made by portfolio company Advanced Dermatology & Cosmetic Surgery (ADCS). The addition of Dermatology of Northern Colorado marks the 31st acquisition ADCS has made since Audax bought the physician group in 2011.
“Buy and build is the central theme of our investment strategy,” says Geoffrey Rehnert, co-CEO of Audax Group, which was founded in 1999. The Boston firm’s private equity division backs companies in the lower middle market in sectors, including industrial manufacturing, distribution and health care. The firm has become adept at building strategic assets out of small and medium-sized companies. To date, Audax has invested more than $3 billion in 88 platforms and 412 add-on acquisitions.
Foodservice equipment provider TriMark USA serves as a good example of the Audax approach. When Audax first backed it in 2006, TriMark was fourth in its market and earned annual revenue of $260 million. Under Audax’s ownership, TriMark made six add-on acquisitions, grew revenue to more than $1 billion and became the largest foodservice equipment supplies dealer in the U.S. Audax sold it to New York private equity firm Warburg Pincus in 2014.
“What has stayed constant since we started Audax is our focus on the lower middle market,” Rehnert tells Mergers & Acquisitions. The firm’s first platform company was formed in 2002, when Audax merged two companies that made liquid-ring vacuum technology, The Nash Engineering Co. and Elmo, a spin-off of Siemens AG. Audax sold the combined company, known as Nash_Elmo Holdings LLC, to Gardner Denver Inc. for $223.5 million in cash in 2004.
“When we acquire a company, we work collaboratively with a management team that wants to do buy and build,” Rehnert says. “We bring the transaction expertise to help accelerate growth.”