- CCMP Growth Advisors closed its fourth buyout fund in July 2024 with over $500 million, above target.
- The firm targets control deals in North American middle-market consumer and industrial companies, often founder- or family-owned, with about $15–75 million of EBITDA.
- Its four platforms (Mammoth, Omnia, Decks & Docks, Innovative Refrigeration) posted ~16% revenue and ~21% EBITDA growth in 2023, supported by 11 add-on acquisitions.
- Investor alignment is notable, with insiders contributing over 10% of commitments alongside re-ups from longtime CCMP LPs and retired partners.
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CCMP Growth Advisors’ successful raise of its fourth fund (CCMP IV) reflects a strategic recalibration under its leadership and a clear positioning in a competitive private equity environment. Sparring with broader fundraising headwinds, the firm’s ability to close above target in mid-2024 strongly implies credibility with limited partners and effective execution to date.
The investment strategy—control buyouts in high-growth, founder- or family-owned consumer and industrial platforms—points to CCMP Growth targeting an oft-overlooked niche. By setting thresholds of ~10% organic growth and US$15-75 million in EBITDA, the firm is balancing growth potential with scale leverage, using add-on acquisitions aggressively: 11 add-ons across 4 platforms in roughly a year.
Early portfolio metrics are encouraging: ~16% revenue growth and ~21% EBITDA growth in 2023 suggest that CCMP Growth’s platform and operating levers are functioning. For a fund of this type, margin expansion via consolidation and operational improvements will be critical, especially as exit multiples may compress in the current market.
The alignment of interest—with insiders putting at least 10% into the fund, legacy LPs re-upping, and leadership continuity from CCMP Capital to CCMP Growth—mitigates some risk. Still, risks remain: deal sourcing in middle markets under tight capital conditions, overpaying, inflationary cost pressures in industrial and consumer sectors, and uncertain exit timing.
Strategic implications include: potential for CCMP Growth to consolidate fragmented sectors via platform + add-on model; opportunity to differentiate using tech enablement in traditional industries; pressure on due diligence rigor to ensure value creation beyond multiple expansion; and the necessity to maintain LP confidence through disciplined exits and transparency. Open questions include the expected timeline to exit these investments, how valuation norms will evolve for sub-US$100 million EBITDA platforms, and whether CCMP Growth can scale its operations and leadership while maintaining performance standards as it attacks multiple platforms concurrently.
Supporting Notes
- Fund IV (CCMP Capital Investors IV, LP) exceeded its fundraising target of US$500 million, closing in July 2024.
- CCMP Growth Advisors was formed in 2022 as the successor to CCMP Capital Advisors, led by Joe Scharfenberger and Mark McFadden, retaining continuity in team and infrastructure.
- Investment focus is on high-growth, middle-market Consumer & Industrial sectors in North America, often in partnership with family- and founder-owned businesses; target companies have US$15-75 million in EBITDA.
- So far, four platform investments: Mammoth Holdings (express car washes), Omnia Exterior Solutions (roofing/exteriors), Decks & Docks (outdoor living products distribution), and Innovative Refrigeration (industrial refrigeration services).
- These platforms achieved ~16% revenue growth and ~21% EBITDA growth in 2023.
- Fund made 11 add-on acquisitions in the last 12 months across its platforms.
- Insider alignment: over 10% of capital commitments from CCMP Growth’s employees, executive advisors, and former partners; plus long-standing LPs and retired CCMP partners also invested.
- Advisors and agents: Ropes & Gray (legal), CrossBay Capital Partners (North American placement agent), and Spartan Advisors (European placement agent).