UPDATED — How hard is it to get a $100 million investment in a company?
If you’re Jack DeBoer, apparently not that hard. At least it wasn’t in a recent deal with New York-based private equity firm Lindsay Goldberg LLC, which is going to invest $100 million in DeBoer’s Value Place chain of extended-stay properties and short-term apartments.
“It was sort of a …hit the bull’s-eye on the first shot,” says Value Place president and COO Kyle Rogg. “Jack knew somebody who knew somebody who knew somebody, and it worked out from the very first meeting.”
Extensive due diligence “became a contract, became a hundred million.”
“It was relatively fast and extraordinarily cordial,” Rogg says. “It was a little bit of love at first sight. … They like Jack’s vision and like the team.”
The infusion from Lindsay Goldberg, which manages $10 billion in total capital, will allow Value Place to expand more quickly than it otherwise would have.
“It’s going to allow us to do, really, three main things,” Rogg says.
They are acquisitions, upgrades and development.
Rogg says the company, which has 45 of the chain’s 181 properties in 32 states, will purchase some properties that franchisees are looking to sell. It also will accelerate upgrades to properties, which it’s calling Value Place 2.0.
Also, the company will begin to develop properties again. Rogg says he expects the number of company-owned and franchised properties to double in the next four or five years.
Without the infusion of money, he says, “We’d be moving more slowly, and we certainly would not be developing company properties.”
DeBoer, who founded Value Place in 2002, will still own what Rogg calls “a very significant piece of the company.” He won’t say what the percentage is or if it’s a majority of the company.
In the last 16 months, Rogg says he and CEO Dan Weber have been building a new management team and adding sales and marketing staff. They’ve also remodeled and expanded the company’s office in the Wilson Estates Office Park.
“Sort of the last piece we needed was access to capital,” he says. “The company really had been surviving … through the recession. We really are in the surviving-to-thriving transition.”
That’s one way to put it.
Or, more simply, Rogg says, “It’s always better to have $100 million than not.”