Private equity firm Sand Oak Capital LLC has teamed up with Carl Marks & Co. as part of the latter’s renewed effort to incubate and build investment businesses. The firms unveiled their partnership on Oct. 15.
New York-based Sand Oak, formed by Jeremy Schwimmer and Jeffrey Mizrahi last year, targets industrial and manufacturing companies in the Rust Belt with revenue of $20 million to $200 million. Sand Oak invests between $10 million to $50 million of equity.
“There are so many companies in the industrial and manufacturing space that do not have succession plans,” Schwimmer said in a telephone interview. “There are companies that have great businesses and a great workforce that don’t necessarily have the impetus to invest more capital and grow the business.”
Schwimmer is an alum of Oppenheimer and Co. Inc., where he worked in the corporate finance group. Then from 2004 to 2008, he was a director at metal recycling company Roth Steel Corp., his wife’s family business. Schwimmer’s wife sold her interest in the company in 2009. In 2008, Schwimmer acquired plastic injection molding company Thermold Corp. and became its CEO. He remains CEO but does not run the business on a day-to-day basis.
Mizrahi worked at Credit Suisse First Boston, focusing on media and telecommunications M&A advisory and corporate finance. He later joined Lindsay Goldberg, where he worked on more than a dozen deals across various sectors. Mizrahi then spent a year and a half at York Capital Management LLC.
“We have deals in the pipeline we’re actively working on,” said Schwimmer.
Sand Oak is sharing office space with Carl Marks. In addition, Carl Marks is providing seed capital and back-office support.
Incubating companies is nothing new for Carl Marks, which has provided support and capital to investment businesses since the 1960s. Such companies have included Jordan Co. and Leucadia National Corp. (LUK).
“Earlier this year we decided the time was right for Carl Marks and for the market to double down on that effort by dedicating a role to identifying, onboarding and eventually managing new businesses,” said Katherine Boas, executive vice president at Carl Marks and a fourth-generation family member helping to run the firm, in an e-mail. “I took on that role shortly thereafter.”
In addition to Sand Oak, Carl Marks is “actively considering others,” said Boas.