Chief, Sanus and Da-Lite now have a new owner: Pritzker Group Private Capital acquires Milestone for an undisclosed price from The Duchossois Group.

The Pritzker Group is run by the Pritzker brothers (JB and Tony), heirs to the Hyatt Hotel fortune. There are 11 Pritzker family members on this year's Forbes 400 list (the definitive list of wealth in America, profiling and ranking the country's richest billionaires by their estimated net worth).

The Duchossois Group will retain “a significant interest” in the business and representatives on the board of directors. The sale is part of the family taking into consideration the interests of its third generation, according to CEO Craig Duchossois, 69, whose father, Richard Duchossois, 92, founded the family business.

At Pritzker Group, the transaction is in keeping with J.B. Pritzker and Tony Pritzker's plans to do more private-equity deals and build up their corporate portfolio. Pritzker Group Private Capital acquires “North American-based middle-market companies with leading positions in the manufactured products, services and healthcare sectors.”

On their web site, Pritzker Group Private Capital lists nine companies they are currently invested in… custom metal components, pallet rental, entertainment cruises, commercial cleaning, material handling, aerospace, medical devices and construction materials-- but not a one in AV or IT.

In contrast, The Duchossois Group owns and runs AMX, Brivo (internet access controls), Chamerlain (access control), Heathco (specialty electrical products), and Churchill Downs (horse racing venues). That’s a neat and tidy vertical portfolio (with only one “racy” exception).

Read closely these three quotes from executives in the official press release…

1. “Our acquisition of Milestone demonstrates Pritzker Group Private Capital’s strategy of investing in clear market leaders with excellent management teams. We are well aligned with the Duchossois family in the view that our permanent, proprietary capital base allows our management teams to build great businesses over the long term,” says Tony Pritzker, Pritzker Group Private Capital managing partner. “Together with the Milestone management team, we have a clear path forward that continues the company’s long history of new product innovation, international growth and add-on acquisitions.”
2. “Our two families have enjoyed both a personal and business relationship for over 40 years,” said Craig Duchossois, CEO of The Duchossois Group. “We look forward to our next generation of partnership. This transaction is representative of the types of opportunities that will be pursued by Duchossois Capital Management, the company we recently formed to manage our family’s strategic investments.”
3. “Our partnership with Pritzker Group Private Capital and Duchossois will launch Milestone into its next phase of growth, providing resources to help us meet the evolving needs of our customers,” said Scott Gill, Milestone chief executive officer. “The resources and experience of both organizations will drive our continued investment behind the innovative products, exceptional service and operational excellence that make a difference for our customers.”

The press release and acquirer clearly call this deal an “acquisition” while the seller and operator prefer to refer to it as “a partnership.” All statements agree Duchossois still has “skin in the game,” although their heart may be elsewhere.

These public statements imply these two wealthy American families in the private equity business have known each other for years and previously done business.

In fact, says Chicago Business, the two families have known each other for some 40 years, with Richard Duchossois, Robert Pritzker and Jay Pritzker (J.B. and Tony's uncles) socializing years ago. And, says the publication, years ago the Duchossois Group sold a $1 billion of rail freight cars to a group the Pritzkers owned.

About the current transaction between these two American Midwest families, Craig Duchossois told Chicago Business,“To do this deal, everyone understood that there was a longer personal relationship between the two families, as well as J.B. and me.”

Yet Duchossois has a portfolio in similar industries: wouldn’t the divestment of control of Milestone AV Technologies weaken the vertical group?

The clue to why it is worth the risk to the Group may be here [http://www.news.nom.co/duchossois-creates-duchossoIs-capItal-7471258-news/]…because, days before, as a prelude to this sale, Duchossois formed a new company: Duchossois Capital Management.

This new entity will assume “responsibility for all current investments as well as seeking new opportunities to deploy capital in a wide array of investment areas including publicly traded securities, real estate, leasing and private equity.”

"Duchossois Capital Management will provide additional diversification for our family and will complement the operating businesses held by The Duchossois Group, thus creating a more balanced approach between operations and investments…" said Craig J. Duchossois, Chief Executive Officer, The Duchossois Group, Inc.

It seems Duchossois Group has concluded there is more money to be made elsewhere. If they can free up some of their own capital (not just what is in the checking account but also what has to be held in reserve to fund future factory refreshments and capital equipment), then they can bring a greater return on their capital by investing rather than running companies.

In recent years, Craig Duchossois and his father “decided we had too much of the company tied up in illiquid operating companies” and they would prefer to have more access to cash via more diverse strategies .Craig Duchossois mentions the company has five members of the next generation involved in the business and they are 20-plus years younger.

“It just made sense to reduce our level of risk and broaden our investment strategies,” Duchossois told local press.

Duchossois Group Chief Operating Officer Bob Fealy, who has overseen Milestone and other Duchossois businesses, said the sale was a means to help Milestone “grow more aggressively.” He told press the new owner already has some potential acquisitions in mind, he said.

Pritzker Group has no plans to cut jobs at Milestone. The new owners said publicly it plans to keep the Milestone management team led by CEO Scott Gill (also part of the management owner group).

The fact that the press release openly states “This transaction is representative of the types of opportunities that will be pursued by Duchossois Capital Management…” suggests that Duchossois will continue to seek to free up more capital by selling majority control of some of their portfolio.

Might that be AMX, Heathco or another? No outsider knows—except for the private equity firms that may already be bidding for control.

Go Pritzker Group Private Capital