- CCMP Growth Advisors closed CCMP Capital Investors IV in July 2024 with just over $500 million to pursue North American middle-market consumer and industrial control buyouts.
- The fund targets founder- and family-owned businesses with $15–$75 million of EBITDA and at least 10% organic growth, often using add-on acquisitions to scale.
- Early activity includes four platform deals and 11 add-ons, with the platforms averaging about 16% revenue growth and 21% EBITDA growth in 2023.
- Alignment is reinforced by insiders providing over 10% of commitments and a diverse LP base that includes institutions and executives from legacy CCMP portfolio companies.
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CCMP Growth Advisors’ successful raise of CCMP IV marks a strategic evolution from its predecessor firm (CCMP Capital Advisors). By forming the spin-out in 2022 under Co-Managing Partners Joe Scharfenberger and Mark McFadden, CCMP Growth has sharpened its focus toward smaller, high-growth control buyouts instead of larger, minority growth equity investments. This shift allows CCMP to target a segment with potentially higher value creation opportunities through operational improvements, platform and bolt-on scalability, and ownership control—though it also carries elevated execution risk and requires disciplined valuation judgments.
The firm’s operational track record in its early platform investments offers promising signals: average revenue growth (~16%) and EBITDA growth (~21%) among initial platforms in 2023 demonstrates that the strategy is delivering on both top-line momentum and margin expansion. Furthermore, the 11 add-ons signal an aggressive consolidation approach in fragmented markets, which can create competitive scale, but also increases integration complexity.
Investor alignment—both via insider capital (employees, legacy partners) and a base including C-suite executives from CCMP’s prior portfolio companies—helps mitigate LP concerns around leadership, consistency, and governance. Also, participation of placement agents (CrossBay, Spartan) and legal advisor (Ropes & Gray) adds credibility to the fundraise.
Strategic implications: CCMP IV targets a niche middle-market control buyout sweet spot—companies with $15-75 million EBITDA, organic growth >10%, and founder/family ownership. These businesses often are underserved by mega-buyout firms, where minimum scale is higher, but can deliver outsized returns if execution (e.g. operational leverage, M&A roll-ups, tech enablement) is strong.
Open questions and risks include valuation pressure in the consumer and industrial sectors amid macroeconomic headwinds; ensuring sufficient dealflow in the $15-75 million EBITDA band; operational capacity to manage numerous add-ons; exit windows and multiples in a private equity market facing IPO and M&A softness; potential impact of inflation, supply chain, labor costs on margins; and alignment of control investments with founder/stakeholder expectations. CCMP’s early metrics provide a favorable starting point, but sustainability through cycles will be tested.
Supporting Notes
- CCMP IV closed in July 2024, exceeding its target of US$500 million in commitments.
- The fund’s focus is on North American consumer and industrial sectors, partnering often with family- or founder-owned businesses.
- Target company EBITDA is US$15-75 million with organic growth of over 10%.
- Four platform investments have been made: Mammoth Holdings (express car washes), Omnia Exterior Solutions (roofing/exteriors), Decks & Docks (marine contractor & outdoor living distributor), Innovative Refrigeration (industrial refrigeration services).
- These platforms delivered ~16% revenue growth and ~21% EBITDA growth in 2023 on average.
- The firm executed 11 add-on acquisitions across the four platforms in approximately one year.
- Investor base includes pension funds, insurance companies, financial institutions, family offices, high net worth individuals; more than 25 C-suite executives or board members from legacy CCMP portfolio companies invested, some also serving on current portfolio boards.
- Insiders (employees, executive advisors, retired CCMP partners) contributed over 10% of fund commitments.
- Ropes & Gray served as legal advisor; CrossBay Capital Partners (North America) and Spartan Advisors (Europe) acted as placement agents.
- CCMP Growth was formed in 2022 as successor to CCMP Capital, retaining much of its former team and infrastructure.