Ex-Resilience Capital executives launch Cleveland deal sponsor

Two former colleagues of Cleveland buyout shop Resilience Capital Partners have launched an independent sponsor to take founder and family-led companies to new heights of success.

Expect them to make their first junior hires once they get a deal or two under their belts. They will also consider raising a debut fund.

Cleveland natives Megan (McPherson) Horvath, until this spring a partner at independent sponsor Steinbeck Investment Company, and Nicholas Leiby, until last fall a partner at family office Weinberg Capital Group and since then sponsoring deals of his own, earlier this month unveiled Tremont Growth PartnersJohn Herman, whom Leiby worked closely with at Weinberg Capital Group, has signed on as a strategic partner and advisor in part to secure co-investors for deals.

Investment Strategy: Initially working out of their home offices, Horvath and Leiby plan to acquire companies generating $2.5 million to $7.5 million in EBTIDA operating in business services, consumer products, niche manufacturing and distribution. The ideal target would have a “good, solid, fundamental” business, said Leiby in an interview this week. It would also, ideally, have a seller looking to roll over equity and to stay active as a board member or member of the management team. “We view ourselves as a bridge to prepare these companies for the next level of institutional or corporate ownership,” he said.

The Trend: Tremont Growth Partners joins a fast-growing population of firms pursuing transactions on a deal by deal basis, at least initially. In just the last few months, Private Equity Career News has also written about the launches of Initium Management and Propel Equity.

Hallmarks of Tremont Deals:

  • Flexible Capital Structure: On each deal Tremont Growth Partners would look to create a capital structure that allows for both growth and stability. Any lenders and equity co-investors brought into their deals would be expected to be long-term partners. The firm also may work alongside other independent sponsors and family offices on transactions.
  • Transparency: The firm takes a “foundation first” approach to working with companies. The idea, Leiby said, is to make sure that the management team, shareholders and others agree at the outset on the goals for a portfolio company. These might include plans for hiring, upgrading systems, expanding geographically, growing through acquisition, and eventually exiting.

Fundraising Plans: It isn’t the first time Horvath and Leiby have worked together. From 2014 to 2018 they worked as mid-level investment professionals at Resilience Capital Partners. At the time the firm was deploying its $350 million fourth fund.  “Given we came from the fund world, it’s certainly something on our radar,” said Leiby, asked about the firm’s own fundraising plans. It depends on a number of factors, he said, such as the market’s reaction to their early deals. “We’re definitely thinking about it. It’s on our radar. But there’s no definite plan to do that at this time.”

More about the founders:

  • Megan Horvath: All told, Horvath has worked on more than two dozen transactions valued at some $500 million. One of her signature deals at Steinbeck Investment Company was the formation of Raydia Food Group from the combination of two Indiana-based food distribution companies in 2022. Horvath led the charge to revive the transaction and once acquired worked with the company to recruit a CEO, find a new corporate headquarters and create a new brand for the company.
  • Nicholas Leiby: For his part Leiby has worked on more than 20 transactions valued at more than $500 million. Shortly after joining Weinberg Capital Group Leiby helped rekindle the firm’s interest in Cleveland-based insurance claims adjustor Alex N. Sill Company. After buying it, Leiby and Herman worked on a strategy that saw the firm add a new CFO, expand its sales team, and acquire complimentary businesses. After the company had doubled in size, the firm sold Alex N. Sill Company last October. “Investors did well. Everybody did well. It was a great outcome,” said Leiby. “That’s what gave me the confidence that I’d then be able to do my own thing.”