Private equity grows and strengthens businesses. It’s that simple. But if you listened to certain politicians and pundits, you’d think private equity, or PE, solely takes advantage of companies for its own gain.
As a CEO who manages a private-equity backed company, I can say this couldn’t be further from the truth. In fact, it’s a basic tenet of the PE model that the companies in which they invest time and capital must succeed in order for the PE firms themselves to succeed over the long-term. This is the industry I know and have experienced.
When I describe my company, I begin by saying that we deliver peace-of-mind to our customers. That’s our fundamental mission. At MNX Global Logistics, we provide specialized, expedited transportation and logistics services. Whether it is transporting medication for a life-saving cancer treatment or an organ for a child who requires an emergency kidney transplant, we are responsible for the safe passage of essential items to the people who need them most.
Commitment is critical
As MNX began to grow, it not only required a firm that could commit necessary capital, but a partner who could commit to its mission. This is when the private equity firm The Riverside Co. stepped in and ensured the company’s new leadership — including myself — was committed to this vision.
Riverside recognizes that when the values of quality service, investment in people, and fiscal responsibility are implemented, the company will be successful and subsequently, Riverside’s investment will be worthwhile. Generally, this is how all private equity firms approach companies to invest in. And, in turn, this approach has helped drive the growth that has made MNX develop as a leader in our industry.
Let me provide a few examples.
Because of Riverside, MNX was able to invest in and build a state-of-the-art customer excellence center in Columbus, Ohio. We have been able to expand our presence in the U.S., Europe and the Asia-Pacific. And in a rapidly changing world, we’ve been able to invest in technology that enhances our visibility, security and efficiency of shipments.
The people count
While I recognize that the best technologies and systems are important, I also know that the people who operate those systems are even more important.
One of our largest investments at MNX has been employee training. By streamlining our processes for efficient and effective training, we not only prepare our employees for their day-to-day work, but we integrate leadership training every step of the way.
The investment in our employees is a direct result of investment decisions coordinated by MNX’s leadership and our partners at Riverside.
MNX is not the only company to benefit from private equity. PE firms currently partner with companies to help employ more than 11 million people in the U.S. alone. Often, these are companies with good paying jobs that provide training to employees for personal and professional growth. Companies like mine.
Economies of scale
Here’s how Riverside made a difference to MNX employees: We have been able to add employees in 22 states, including Ohio, Florida, and Georgia. In addition, with economies of scale derived from our relationship with Riverside, we were able to reduce the cost of healthcare for our employees while improving the benefits provided.
We also improved the employee 401K plan, and are in a position to attract and hire talented employees with salary and benefits packages above the industry average.
It’s important to recognize that over-regulating and over-taxing PE firms will result in less investment in small to mid-sized companies such as MNX. Critics of the PE industry would be wise to examine the PE business model more closely and realize the true value they provide to companies — like mine — throughout the United States.
Needless to say, private equity benefits American workers and businesses. At our headquarters in Irvine, California, we are proof that PE investments can increase hiring, provide expertise to guide expansion, and help companies innovate and remain competitive.
It is because of our partnership with Riverside that we continue to deliver essential materials, life-saving technology, and most importantly, piece-of-mind.
Paul Martins is the president and CEO of MNX Global Logistics.
