The first weeks of 2018 saw a new player in Dallas’ private equity space. Newcomer The Coltala Group derives its name from the word “colt,” representing “the stage of development where a male horse is at its fastest,” combined with the Latin word “ala,” meaning wings.
The company’s ideology also combines two ideas: something original mixed with a more familiar business formula. “Our strategy is unique,” says Coltala CEO and co-founder Ralph Manning, a former partner and founder at Dallas-based Progress Equity Partners. “We acquire quality businesses and bring them a level of resources and capability not generally available to small and middle-market companies.”
The Coltala Group contends that a traditional private equity firm focused solely on ROI is employing an outdated model. Coltala, its founders assert, has a better idea. The idea’s cornerstone is a commitment to being “honor-bound stewards” of its portfolio companies—to going beyond mere financial growth by promoting a culture of innovation, results, and continual employee education. President and co-founder Edward Crawford, a Goldman Sachs alum and former U.S. Naval Intelligence officer who received the Bronze Star for his service, says: “Honor never goes out of style.”
Coltala aims to acquire majority control of small to mid-sized family or privately owned companies. It’s targeting the healthcare management, manufacturing, and branded products and services sectors and companies with EBITDA of $3 million to $10 million. The firm says it’s “fully capitalized” by its partners, augmented by a select group of outside investors including families and institutions. It plans to invest $5 million to $15 million into each acquisition.
It also offers its own proprietary Coltala Enterprise System (or CES) to help its portfolio companies achieve optimal scale. “This system gives the companies access to sophisticated tools and coaching that are unique,” Crawford says. “If a company has a 40-day lead time, [for example,] we’re going to try to get them down to a two- or three-day lead time.”
The lone company in Coltala’s portfolio thus far is Revere Packaging Holdings LLC, a Kentucky-based producer of single-use aluminum and plastic food containers. Coltala pumped $14 million into the company, which was founded in 1801, and helped with a total rebranding. In addition, the Dallas firm used its CES to help Revere integrate its add-on acquisition of a California company called Plastic Package LLC.
“It starts with the people. Instead of dictating what management’s going to do, we work together,” Crawford says. With Revere, “we used our CES to do a complete organizational assessment of the human capital and align the right people in the right positions. … Working together as one team, the company now has a unified digital platform for communication, collaboration, and marketing.”
Since Texas Christian University grads Manning and Crawford met in 2015, their brainchild—which would become The Coltala Group—has expanded to include additional co-founders Chris Goodwin, formerly of Hudson Advisors, and Christine Spadafor, a veteran of Boston Consulting Group. Board advisor Chuck Jarvie is a former president of Dr Pepper Co. and a former director of Guiness America Inc.