For many risk-averse private equity investors, purchasing a fledgling food company like frozen meatball maker Oh Boy! would have spelled disaster.
The San Fernando, Calif., business was severely underperforming when Los Angeles-based CREO Capital Partners bought it in 2005. But CREO’s partners were convinced Oh Boy! was salvageable, so they rolled up their sleeves and dug in, reversing the company’s losses and along the way developing an investment strategy for their firm.
“We had to step in and save the business, which was losing more money than we thought,” says partner Rob Holland, an ACG Los Angeles member whose plan was to turn Oh Boy! around and make a fast profit on its sale. “It was more work than we anticipated, but the experience changed CREO’s strategy from being a generalist private equity firm to a food-focused one.”
CREO was founded in 2005 by Holland and Gregory Bortz, both former Wall Street investment bankers with heads for numbers but admittedly little hands-on experience with troubled companies. They raised their first fund that year for an undisclosed amount with the backing of one unnamed high net-worth individual investor and were intent on buying companies across a range of industries.