A private equity firm based in Palo Alto is taking on what it called “the Amazon effect.”
Consider that once dominant companies like Sears and JC Penney are filing for bankruptcy protection, or on the brink. It’s because these once household words have fallen badly behind — or never truly developed — technological-based operational techniques that behemoths like Amazon not only invented, but continue to innovate within and have mastered.
HGGC is the Palo Alto-based firm ready to take on the “Amazon effect.”
The firm announced recently that it will merge MyWebGrocer with Mi9 retail. Both companies are backed by backed by General Atlantic. The new company will be called Mi9. HGGC is a shareholder along with General Atlantic and Respida Capital. HGGC acquired MyWebGrocer in 2013.
HGGC CEO and co-founder Rich Lawson points out that Amazon spends 20 times as much on R&D that the other top 20 retail companies combined. If other retailers expect to compete, they simply must ramp up their own R&D and adopt the technologies, infrastructure, logistics and distribution strategies that have enabled Amazon to dominate the retail sphere like no other single entity in history.
Lawson added: “Retail is at a tipping point.” He went on to say that his firm has the technology to help those retailers still out there who are struggling to overcome the Amazon effect.
Mi9 Retail is a software provider based in Miami. It assists traditional companies manage merchandise, take and process orders, provides data analytics and point-of-sale technology. Now bolstered by the investment power and vast expertise of the HGGC team, the company is poised to help any retailer anywhere in the world do battle with Amazon — and win.
HGGC was founded in 2007 by former NFL quarterback and Hall of Famer Steve Young along with Richard Lawson, Jon M. Huntsman, Gregory Benson and Robert C. Gay. The firm concentrates its efforts on middle-market companies. It uses a strategy of acquisitions, leveraged buyouts and market recapitalization to bolster the entities it accepts into its portfolio.
Sectors where the firm concentrates its efforts include grocery sales, car dealers, insurance agents, marketing firms and others
Bloomberg provides a corporate snapshot of HGGC LLC, billing it as a private equity firm. The report shows HGGC specializes in a broad range of investment endeavors covering a comprehensive number of sectors. The firm’s ventures range from leveraged buyouts, acquisitions, and investments to recapitalization and restructuring. Sectors include business and financial services, manufacturing and industrial concerns, technology and software development, and healthcare. Although the firm primarily invests in North American companies, it is open to global opportunities.
The firm invests with the intention of HGGC LLC taking a majority position or controlling rights with a minority position. The investments typically range from $25 million to $125 million in companies with an EBITDA of $15 million to $75 million and a worth of at least $100 million.
Bloomberg lists the firm’s key executives and founders. Among them are Richard Franklin Lawson Jr., co-founder and chief executive officer, Robert Christopher Gay, co-founder, executive director, and senior adviser, and Lance Riley Taylor as chief financial officer.
In October 2018, BusinessWire announced that HGGC LLC added two new executive members and four associates to its team. The executives are Colin Phinisey, investment banking professional, and Christopher Guinn, executive director. The firm chose the additional members, all from blue-chip company backgrounds, to strengthen its talent pool for expected growth.
The announcement focuses on Colin Phinisey, the appointed capital markets expert. Phinisey comes most recently from Deutsche Bank Securities Inc., where he spent more than eight years. The firm expects Phinisey to guide them in developing best practices to further their financing efforts. Phinisey specializes in mergers and acquisitions, debt finance, and leveraged buyouts.
The interview reports that Lawson states his firm, HGGC LLC, has been involved in financing $4.3 billion in transactions, and he expects transactions to surpass that amount in 2019. Founded in 2007, the Palo Alto-based firm has additional offices in West Palm Beach, Florida, Salt Lake City, Utah, and Foxborough, Massachusetts