Mosaic Capital Partners has closed a $165 million small business investment company (SBIC) fund that will provide mezzanine debt and equity to lower middle-market companies.

This is Charlotte, North Carolina-based Mosaic's first fund. The private equity firm plans to invest or co-invest between $3 million and $15 million per deal for acquisition financing, control buyouts, employee stock ownership plan (ESOP) leveraged buyouts or recapitalization. For more on Mosaic's ESOP activity, its area of expertise, see Recaps Turn to ESOPs.

The company targets lower middle-market businesses in the southeastern, mid-atlantic and midwestern U.S. that have more than $10 million in revenue in several sectors: business services, chemical, consumer products, environmental services, food and beverage, health care, independent distribution, material handling, niche manufacturing and third-party logistics. Mosaic also has a merchant banking affiliate, ButcherJoseph & Co., which provides it with proprietary deal flow. 

Mosaic already has made several investments, including the Apothecary Shoppe, a compounding pharmacy in Tulsa, Oklahoma, and non-emergency medical-transportation business Express Medical Transporters, which Mosaic invested in in August.

Mosaic is one of several firms to close SBIC funds recently. In March, Capitala Group closed a $125 million SBIC fund, and before that the Riverside Co., in July 2014, closed a $350 million SBIC fund. For more on SBICs, see SBIC Lenders Grow in Small Bank Space.                                                                                             

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