About 11 years ago, Huron Capital Partners LLC got a tip about an investment opportunity. A group of executives wanted to form an entity to acquire specialty chemical companies, but they needed funding. Huron Capital, a Detroit-based private equity firm, jumped at the opportunity. The tip came from a source now known in the private equity world as an independent sponsor, essentially a freelance agent who connects companies seeking private capital with would-be investors.
“The independent sponsor helped us put together this concept of the umbrella company,” says Christopher S. Sheeren, a partner with Huron Capital and member of ACG Detroit, noting, however, that the “independent sponsor” title did not exist at that time.
The independent sponsor joined the board of the newly created platform company and was very helpful in due diligence as the business went ahead with its plan to acquire several other companies. “She had a calming influence and was a smart deal person,” Sheeren recalls.
Huron Capital exited the business, Quest Specialty Chemicals, seven years later. “It was a great deal,” Sheeren says.