DalFort Capital Partners, a Dallas-based investment group focused on lower middle market industrial businesses, announced the closing of its $166 million DalFort Capital Partners Fund II, along with the sale of its portfolio company Polymer Adhesive Holdings and a new addition to its leadership team.
DalFort Capital Partners Fund II included $155 million in commitments from limited partners, exceeding its hard cap, and $11 million from the general partner, bringing the fund’s total to $166 million. Fund II closed with extensive support from family offices, institutional investors, and high-net-worth individuals, many of whom are current or former business owners and operating executives within DalFort’s target industries, the company said.
“We’re grateful for the trust our investors have placed in DalFort and proud to have attracted such high-quality partners and team members,” DalFort Managing Partner Bryan Bailey said in a statement. “As our firm grows, we remain committed to partnering with founders and business owners in the lower middle market industrial sector to drive exceptional results.”
“This successful exit, team expansion, and fund raise provide us with the bandwidth and resources to continue executing on this mission in a meaningful way,” Bailey added.
Continuing investment strategy
Fund II will continue to advance what DalFort said has been its strategy for almost a decade: investing in founder- and family-owned industrial businesses in the lower middle market, targeting companies with $3 million to $15 million of EBITDA and enterprise values of $15 million to $100 million. DalFort focuses its investments on companies in precision manufacturing, specialty chemicals, industrial services, building products, aerospace and defense, power and infrastructure, and distribution, fragmented sectors where “operational expertise and a patient approach to ownership create durable value.”
Since its founding in 2016, DalFort has completed seven platform investments and 14 add-on acquisitions representing more than $250 million of aggregate deal value spanning five realized investments and three active platforms, the firm said.
Business with ‘a clear growth trajectory’
Mineral Wells-based Polymer Adhesives Holdings was sold to DiversiTech Corporation, a Duluth, Georgia-based portfolio company of Partners Group.
“It was a privilege to partner with Brady Basil and the entire Polymer Adhesives team,” Bailey said. “We invested in a strong business with a clear growth trajectory, and the team executed on every front. I wish DiversiTech and Polymer Adhesives every success in this next chapter.”
Since DalFort’s initial investment in May 2023, the manufacturer of high-performance duct sealants, adhesives, and fire-stopping materials has been growing, the firm noted. During the partnership, Polymer Adhesives successfully completed two add-on acquisitions: Volunteer Adhesives, a Lafayette, Tennessee-based manufacturer of solvent- and water-based adhesives, and Fielco Adhesives, a manufacturer and formulator of two-part epoxy systems. The deals expanded both DalFort’s product offerings and its manufacturing footprint, the firm said.
Expanding leadership
DalFort has scaled its team to support the firm’s growing platform with, most notably, Marquez Bela joining the firm as senior partner.
Bela has nearly 30 years of middle-market investment experience, including a twelve-year tenure at Rosewood Private Investments and prior roles at Capital Southwest Corporation, Parallel Investment Partners, and Goldman Sachs.
In a statement, Bela said what drew him to the firm “is its differentiated approach to the lower middle market, combining patient capital, deep operating expertise, and a genuine commitment to the businesses and people we partner with.”
“This segment of the market requires such an approach, and DalFort’s reputation, and results, show that this is a firm built on these principles,” Bela added.
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