GFI Acquires Interest in Cherokee

May 03, 1999 by Jeff Shepard

GFI Energy Ventures LLC (Los Angeles, CA) announced the completion of a substantial investment in Cherokee International LLC (Tustin, CA). Through the investment, GFI and its co-investors, including Oaktree Capital Management (Los Angeles) and RIT Capital Partners plc (London), have acquired a 60 percent majority interest in the power supply company."With this investment, we have bought a majority interest in the fastest-growing, most profitable power supply company in North America," stated Ian Schapiro, a founding principal at GFI. "During our due diligence, we spoke with almost every customer, and Cherokee has outstanding customer relationships. It will make a fantastic public offering sometime in the next 3 to 5 years."Cherokee President Pat Patel commented, "This means we now have a very large partner, who also has partners in the energy industry. Basically, we are going to grow. They like what they see, and will leave us alone and be there when we need them. They can help take us to the next level, which could include a public offering. We want to expand our areas of coverage, and are being very aggressive in the telecom area."Patel stated that Cherokee will also be looking to grow through acquisitions. He anticipates the company will grow 60 to 70 percent over the next year.According to GFI, the founder executives of Cherokee will continue to manage the company. Cherokee is the 18th transaction GFI has originated in the power industry since 1995, with aggregate investments now totaling over $360 million.