Stephens Group Invests Millions

by George Waldon  on Monday, Aug. 27, 2007 12:00 am  

W.R. "Witt" Stephens Jr, co-chairman and CEO of The Stephens Group LLC

(Click here for a list of The Stephens Group LLC officers.)

Witt Stephens Jr. didn't expect the pace of transactions would be so lively when The Stephens Group LLC was launched in July 2006. But it's the sort of first-year surprise the 39-year-old executive can endure with a smile.

The Little Rock firm, which sprouted out of a reorganization of the Stephens family business empire, exceeded $200 million in private equity investing during its first 12 months of operations.

"This started faster than we thought, but we found some really good deals," said Stephens, the co-chairman and chief executive officer.

Although it wasn't announced until February, a $55 million private equity deal with Seminole Energy Services LLC of Tulsa was among the first big ones for The Stephens Group, and discussions date back to 2004.

Bob Rosene Jr., chief executive officer of Seminole Energy Services, said his company has bought natural gas from the Stephens family in a relationship that long predates last summer's transaction.

"We have known the Stephens people directly or indirectly through Stephens Production Co. for 20 years," Rosene said. "This is the first time I've taken outside money. I've always used personal equity or traditional bank financing. It was a significant step for us."

Among the things that attracted him to partner with The Stephens Group is its perspective on investing and its disdain of management fees and other forms of front-end profiteering. Time horizons of three to five years are common among private equity groups, which push companies to crank out short-term payouts that could stunt longer-term profits.

"We don't feel that pressure," Rosene said. "They have a different mindset, and I really like working with them. They have high expectations, which I have no problem with.

"They are an extremely talented group, and they will do whatever they can to help the company, without getting involved in the minutia of day-to-day operations."

The Seminole transaction also has the distinction of being the only Stephens Group deal where the dollar amount saw the light of day. Financial details were absent from four other private equity transactions announced. (See New Investments at the end of this article.)

These five transactions accounted for half the deals that The Stephens Group closed during its first year of business. Of the 10 total transactions, most fell between its typical investment range of $5 million to $75 million.

 

 

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