Turnaround Company Set Up in Newport

Some investors bet their dollars on struggling companies trying to make a comeback. Some professionals specialize in helping those firms return to health. Now, Crossroads Capital Partners in Newport Beach plans to do both.

The new firm, founded by former Price Waterhouse corporate recovery expert Dennis I. Simon and other turnaround specialists, invests in distressed businesses, takes over management and steers them back to profitability. Unlike venture capitalists, the Crossroads partners will focus on mature businesses, and will run the companies on a full-time basis.

Crossroads has raised about $200 million in capital from foreign investors, large corporations and investment banking firms, and will put anywhere from a few million dollars to $50 million into targeted companies, Simon said. The long-term plan is to find firms in similar lines of business that can be rolled into a larger company.

Two investments--in the medical devices field and retailing--are close to being finalized, Simon said. He’s also interested in sports equipment manufacturing, packaged foods, health care, communications and high-tech. Although Crossroads will invest nationwide, he expects to find many promising candidates in Orange County. “We could have picked the East or West Coast to center our business,” he said. “We think this is a more vibrant market for what we want to do.”

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Patrice Apodaca covers economic issues for The Times. She can be reached at (714) 966-5979 and at patrice.apodaca@latimes.com.