Cedar Creek forms venture to buy retailers
The Business Journal of Milwaukee - by Alby Gallun
Cedar Creek Partners LLC, a private equity firm founded in late 1996, has formed a venture that will invest in the retail industry.
The Milwaukee-based firm has linked up with Connecticut investor Bruce Mommsen in a partnership that will acquire one or more chain-based retail businesses. The Mommsen Group, as the new entity is called, is seeking retail companies around the country with annual revenues ranging from $10 million to $100 million.
The partnership continues a relationship that began in 1992, when Cedar Creek's principals were working for Banc One Venture Corp., the small-business investment company controlled by Banc One Wisconsin Corp. That year, Banc One invested in Imperial Sports, a Flint, Mich.-based chain of apparel and footwear stores that Mommsen ran as chief executive officer.
Mommsen sold Imperial last year to Just For Feet Inc., a Birmingham, Ala., sportswear chain. The managers at Banc One Venture, meanwhile, left the bank to form Cedar Creek in late 1996.
"Retail has a well-deserved reputation for being relatively high-risk, but Bruce Mommsen is just an excellent operator," said Robert Cook, a managing member at Cedar Creek. "Part of the reason we we're interested in pursuing retail is because we have a manager who we have a lot of faith in."
Cedar Creek raised $77 million for its private equity fund last year and is exploring investment opportunities. The firm focuses on acquiring well-established Midwest companies, mainly in the manufacturing sector, with market values of $50 million or less.
Cedar Creek, which also manages about $30 million for Banc One, so far has invested in one company, Dart Distributing LLC, a Chaska, Minn., distributor of compact discs, cassettes, movies and computer software. Cedar Creek has letters of intent pending with four other sellers, Cook said.
Cedar Creek and Mommsen haven't decided how much of a stake each investor will own in the new venture, Cook said. They're also waiting to see what opportunities are available before they decide how many companies The Mommsen Group will buy.
"If we come across something with two or three concepts, we would pursue that, but what we'd like to do is find one company that would occupy our attention," Cook said.
Mommsen, who lives in Greenwich, Conn., was an executive for a Coca-Cola bottling company in New York before buying a stake in Imperial Sports in 1988.
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