Ep 3. Tom Gores: Carveout King, Platinum Equity, M&A&O

Most private equity firms will tell you they do operations. Platinum Equity is operations. In this episode, we go deep into one of the most consistently successful and least talked-about private equity firms on the planet. Thirty years, 500+ acquisitions, $50 billion under management, and a trademarked methodology that treats the "O" in M&A&O® not as an afterthought but as the entire thesis. We trace Tom Gores from a grocery store in Genesee, Michigan to a $7.2 billion acquisition of Ingram Micro — and unpack exactly what his firm does differently at every stage of the deal cycle: how operational diligence starts at the management presentation, why Portfolio Operations is on-site on Day One, and how 59 add-on acquisitions in a single year is a strategic tool, not a spending habit. We break down the two deals that define Platinum's carve-out capability 1)  Vertiv transformation from a nine-unit Emerson division into a hyperscale data center infrastructure leader, and 2) Ingram Micro IPO that closed the loop on the largest acquisition in Platinum history. And we extract five principles any operator, acquirer, or executive can deploy immediately — whether you're integrating a new division, building a buy-and-build platform, or just trying to understand why some PE firms reliably create value while others are still talking about it. This one is for the operators.

Show Notes 

ABOUT PLATINUM EQUITY

• Founded: 1995 by Tom Gores (born Tewfiq Georgious, Nazareth, Israel, 1964)
• Headquarters: Beverly Hills, California
• AUM: ~$50 billion (2025)
• Total acquisitions: 500+ over 30 years
• Active portfolio: ~60 operating companies
• Portfolio aggregate revenue: $100B+
• Portfolio employees: ~200,000 globally
• 2024: 71 transactions (12 platforms, 59 add-ons), 13 divestitures
• Fund VI: $12.4B, closed H1 2024, 400 LPs, 37 countries

TOM GORES BIOGRAPHY NOTES

• Born: July 31, 1964, Nazareth, Israel
• Background: Catholic, Greek-Lebanese heritage
• Moved to US age 4; grew up Genesee, Michigan (10 miles from Flint)
• Education: Michigan State University, BS Construction Management, 1986
• Net worth: ~$10.1B (2026 estimate)
• Sports: Owner, Detroit Pistons (2011); 27% stake, LA Chargers
• Philanthropy: FlintNOW ($10M pledge 2016); Detroit River Rouge Park Community Center ($20M, 2022)

KEY CASE STUDIES REFERENCED

• Vertiv (formerly Emerson Network Power): Acquired 2016 for ~$4B; carved out from Emerson Electric; 9 legacy units unified into 'One Vertiv'; repositioned toward hyperscale data center market; IPO'd 2020
• Ingram Micro: Acquired 2021 for $7.2B from HNA Group; $49B revenue; 35,000 employees; 60 countries; digital transformation + operational improvement; NYSE IPO October 2024

Operational Velocity is for education and general information only and is not investment, financial, legal, or tax advice, and nothing in it is a recommendation to buy or sell any security. The views expressed are the host's own, the company and figures discussed are drawn from public sources believed reliable but not guaranteed, and you should do your own research and consult a qualified professional before making any decision.

Transcript

SPEAKER_00 0:10

Great returns aren't luck. They're built on the floor. Operators and investors always pushing for more. From the deal sheets signed to the systems in place. Speed without precision is just running a race. Operational velocity where execution sets the pace.

SPEAKER_01 0:25

Hello, everybody, and welcome to the Operational Velocity Podcast. In this episode, I'm going to go into what I call operations first leaders. And these are folks that in business, private equity, any organization for that matter, these are leaders that put operations front and center. And in this episode, we're going to profile a guy by the name of Tom Gores. He is the founder and CEO of Platinum Equity, which is arguably one of the most operational sophisticated private equity firms on the planet. 30 years of buying broken off, neglected, and underestimated industrial technology distribution manufacturing businesses and turning them into market leaders. They've done more than 500 acquisitions with approximately 50 billion in assets under management and a portfolio generating over 100 billion in aggregated annual revenue, and they employ roughly 200,000 people worldwide. And what's interesting about Platinum Equity and Tom Gore is they have a self-description, which is as follows We are investors, operators, builders, and change agents. Not in that order, but all at once. And this is not a marketing tagline, it's a structural truth embedded in how the firm was built, how deals are sourced, how diligence is conducted, and how portfolio companies are run from day one. So this is not a story about financial engineering. This is a story about operational doctrine. Before we talk about the machine, you need to know the builder. So Tom Gores, he was born in July 31st, 1964, in Nazareth, Israel, to a Catholic family. He had a Greek father and a Lebanese mother. And when he was just four years old, his family immigrated to the United States and they landed in Genesee, Michigan, which is approximately 10 miles northeast of Flint, Michigan. So let that sink in. Flint, Michigan, which is one of the hardest-hit industrial cities in America. And it's a place that teaches you viscerally what happens when operations fail at scale and when supply chains collapse, when management loses the thread, and when a SETI bets its entire economic identity on a single industry, and that industry restructures away from it. And so Tom, he grew up watching that and he grew up working. His family had a small grocery store, so he stocked shelves. He went to Genesee High School. He played defensive back in football, middle field, middle infielder in baseball, and a guard in basketball. And this comes to light because he was a big sports guy, as we'll find out later. But he's he could say characterize him as a classical, you know, industrial Midwest kid. And then he went to Michigan State University, where he actually worked as a janitor and a telemarketer to fund his own education. He graduated in 1986 with a degree in construction management, which is interesting, construction management, not finance, not economics, but construction management, which one can argue it's a discipline of coordinating complex multi-party processes under time and cost pressure to deliver physical outputs, project sequencing, resource allocation, dependency mapping, and scope control. So if you're listening to this show, you recognize that that's operations. That is the intellectual DNA that shapes how Tom Gores thinks about businesses. And his early career was similarly grounded. A stint at Continental Telephone, then helping a run a lumber logistics firm, Ventec, and eventually driving with his wife in a used Cadillac from Michigan to Los Angeles in 1989 to run the West Coast operation. He worked for his brother Alec at the Gores Group and learned the buyout business from the inside. And in 1995, in his home in Sherman Oaks, California, he started Platinum Equity. And the beginning is instructive because Gorez, he didn't have Goldman Capital behind him. He didn't have a Harvard network. He actually cold-called companies to find divisions they wanted to offload. So his first acquisition was a company called LSI, which is a company that generated computer graphics to reconstruct accidents for courtroom testimony. He bought that business for around $200,000 and he stabilized it and served the existing customers and essentially got it back to profitability. So that thesis, which is essentially buying something neglected, getting in close, fix the operation, serve the customer, then grow, really never changed. But the deal sizes went from six figures to billions. But the thesis stayed identical. So his next five years, 32 acquisitions, $226 million deployed, $940 million in realized returns, a 4.2x return before most firms had even settled on their investment strategy. And he often says the people in Michigan, how human they are, how real they are, that affected the platinum philosophy. And he often describes himself as just a boy from Flint. He's worth over $10 billion today, and he's still the chairman and CEO of Platinum Equity. He's the owner of the NBA team, Detroit Pistons, and by almost any measure, one of the most consistently successful operational private equity investors in history. And so there's a question worth asking: what does he know that others don't? The key to answering that question is something called M N A and O, Mergers, Acquisitions, and Operation. And it's trademarked. And it's not just trademarked as a brand, it's trademarked because Platinum believes they genuinely invented the approach and they want the market to know it. Many private equity firms they operate essentially on a two-phase model. They buy the business, then they operate it, and then finally exit. But essentially the operating team enters after the deal closes and they're handed the keys in the thesis deck and told to execute. And so what you have is essentially two separate functions, two separate timelines, and two separate teams. Platinum runs a different architecture. The MA operations team is embedded in the deal process from the initial management presentation. The serious, very serious first meeting with the target company, and not after the term sheets, not after the diligence, but actually from that first initial presentation. And why does this matter? Because the thing you learn in operational diligence determines what you're actually buying. Financial diligence tells you what the business has been. Operational diligence tells you what the business can become, and critically, what it takes to get there. And if you think about it, those are two different questions, and they require different people with different expertise. So Platman Equities ML operations team is a large in-house group of functional experts, people who have actually run procurement functions, built manufacturing lines, restructured distribution networks, rebuilt IT systems, and redesigned sales organizations. And they ask very smart questions because essentially they're operators asking the only question that matters. Can we fix this? And exactly how. And this essentially shapes the valuations. If you want to quantify the operational upside before you close, then you have to price with conviction and move with speed. The next step is the capital structure, which is essentially a parallel track. So while the operational plan is being built, Platinum's capital markets team is simultaneously designing the optical capital structure. These aren't sequential processes, they run in parallel because the operational plan and the capital structure are interdependent. So the level of debt you can service depends directly on the operational improvements you can realistically execute. Step four is the actual portfolio operations, which is on site from day one. So as the deal closes, the portfolio operations team is essentially on site, not in two weeks, not after the integration kickoff meeting, but on day one. And from there, an operating council is established. Platinum's leadership and portfolio company management work together to monitor and supervise. And this is not an advisory relationship. Platinum describes their approach as aggressive, extended on-site presence, deep functional engagement, all relevant levers of the operational playbook deployed simultaneously. And I think this is where Platinum separates from firms that talk about operational value creations and firms that actually do it. Because their portfolio operations team physically embeds, they take interim operating roles. So they are not visitors, they are not colleagues, they are actually embedded. The next step is add-on acquisitions. And so while operations are being transformed, the MA team is already hunting for bolt-on acquisitions that accelerate the value creation plan. So in 2024 alone, Platinum Equity completed 59 add-on acquisitions alongside 12 new platform deals. And that's not opportunistic tuck-in behavior. That's a systematic program using acquisitions as an operational lever, adding capabilities, customers, distribution channels, or market position that organic improvement can't achieve alone. And the last step is essentially the exit. And Platinum's dedicated sell-side team begins planning the exit while the operations are still being transformed. And the exit isn't an event that happens at the end of the hold period. It's essentially a destination that the value creation plan is engineered toward. And this shapes every operational decision: what you fix, what you build, what you acquire, and what you discard. So that in the nutshell is the M A and O doctrine. It's fully integrated, operationally anchored, and executed with speed and conviction. And they state that the O is in RDNA. We're not a financial firm that does operations. Operations is the firm. Let's dive a little bit deeper. Of all the deal archetypes in private equity, corporate carve outs are probably the most highest potential and also the most operational demanding. They're essentially a business that lived inside a large organization, protected by corporate infrastructure, constrained by a corporate bureaucracy, and almost always strategically underprioritized by the parent company. So when a PE company or any business for that matter acquires a carve-out, you're not buying a clean business. You're buying a division that never had its own treasury, its own IT architecture, its own procurement contracts, and its own HR finance functions. It's always someone else's problem and someone else's second priority. So most pre-e firms approach this with one of two strategies. They either outsource the separation of consultants and hope for the best, or underestimate the complexity and pay for it in year one, performance drag. Both approaches bleed value. So what Platinum Equity did is that they built an entire operational infrastructure around Carvit specifically. And separation, not an integration problem to be solved after the deal closes. It is the deal. And the operation plan for a carve out separation is built during diligence. So let me walk you through two examples that define platinum equity's carve-out capability. The first case is a company called Vertive, which is the Emerson Electric Network Power Business. And they in August 2016 was doing about $4 billion. And this is a business that provides critical infrastructure for data centers, power, cooling, monitor systems, the physical and electronic plumbing that keeps servers alive. And on the surface, this steel scared away most potential business bidders. Because the business was an amalgamation of nine separately managed units, and it had been living inside Emerson for years, and it was deep prioritized as Emerson focused on repositioning towards automation and industrial software. So the management team was essentially focused on selling to enterprise customers, building one-off data centers, exactly the wrong customer segment, as the market was rapidly shifting toward hyperscale cloud providers like AWS, Microsoft, Azure, and Google Cloud, as well as co-location operators, such as Equinix and Digital Reality. And multiple bidders walked away because they thought it was too complex and it was too late to the hyperscale market. So too much separation to execute. But Platinum Equity, they went the other direction. And their operational diligence team identified three specific intervention points. The first was the product and service portfolio, which was actually strong. The customer segmentation was not wrong, but it's technology. And the second, the business could be de-risked quickly by cutting costs, shedding a non-core unit, and killing an uncompromised software development project. Third, the real opportunity was zero base, the operating model, so to rebuild the go-to-market organization around hyperscale, restructure manufacturing, redesign product development, and consolidate the nine siloed units into a single, coherent company. They called this goal One Vertiv. And this would be a customer-focused organization capable of serving the exploding world of mega data centers. So they built Vertiv. They IPO'd it in 2020. And Vertiv today is a multi-billion dollar public company, a critical infrastructure provider for the very hyperscale data center market that Platinum identified and repositioned toward while the most of the PE world thought the opportunity had already passed. So once again, this is not financial engineering. That's the operational insight that can be deployed at speed. And at the time of the acquisition, Ingram had nearly $49 billion in annual revenue, over 35,000 employees, operations in 60 countries, and it was the largest technology distributor in the world and a Fortune 100 company. This was the largest acquisition in Platinum's history, and it was acquired from HA Group, a Chinese conglomerate that had been under severe financial distress, making the transaction complex in ways that went well beyond standard MA. So Platinum's thesis, an operational improvement plan, a digital transformation acceleration, and a surgical use of buy-side and sell-side MA to sharpen Ingram's focus on its core business. So three years later, in October 2024, Ingram Micro returned to the public markets on the New York Stock Exchange, and Platinum guided a comprehensive operational transformation of one of the most complex logistics and technology distribution businesses in the world and delivered an IPO exit within a single hold period. Quite impressive, if I say so myself. And the scale of that operational undertaking is worth pausing on. Think about it. So when Platinum says their approach works at scale, this is the proof point. So what actually makes carve outs work? You can think about from the two examples that Platinum's broader carve-out playbook, the operational imperatives are consistent. Day one readiness, this is the Treasury, IT, HR procurement, finance functions, that must be standing before the deal closes. You don't get a transition service agreement to bail you out, and you build the infrastructure and diligence and stand it up at close. Separation architecture. This is the mapping of every shared service center that the parent provided, quantifying the cost to replicate or outsource, and sequencing the separation to protect business continuity. And this, my friends, is not a 90 day project. It starts at the management presentation initially. Management alignment. The carved out business often have leadership teams that spent their entire careers inside a larger organization. And they may be excellent functional operators, but may not. Have the experience running an independent PL, managing a board, or making capital allocation decisions. So Platinum either upgrades management or embeds its own people in operating roles to bridge that gap. Customer communication. The moment a carve out is announced, customers wonder if their contracts will be honored, their service levels maintained, their relationships preserved. And Platinum's deal teams treat customer communication as an operational imperative, not an afterthought. And last but not least, strategic repositioning. The best carve outs have an embedded strategic problem that the parent company never solved because it wasn't core to their main business. Identifying that problem in due diligence and having a credible answer is often what makes a difference between a meteor outcome and a great one. And so what Platinum Equity states very clearly about carve outs is they say that carve outs are an area of expertise and they rely on capabilities and resources to create infrastructure while also crafting a strategic vision for building this business into a global platform. Let's shift gears a little bit and let's put some numbers and some data around this. Because a operational doctrine without data is just philosophy. So Platinum Equity was founded in 1995 with essentially no outside capital. And today it manages approximately $50 billion in assets under management. And that is one of the more remarkable AUM growth trajectories in private equity history, built not on leverage, arbitrage, or market timing, but on operational differentiation. Their fund number six closed in the first half of 2024 and came in at about $12.4 billion. And that exceeded the firm's original $12 billion target, and it raised from nearly 400 limited partners across 37 different countries. And that is not a fund that relies on only a handful of large institutional investors. The LP base is diversified, global, and repeating, which tell you something important about the realized returns across prior funds. The 2024 deal activity is instructive on its own terms, as there were 12 new platform acquisitions, 59 add-on acquisitions, 13 divesters, with a total of 71 transactions in a single year, in a year when the MA market was still broadly constrained and many sponsors were sitting on the sidelines. So over that full 30-year history, more than 500 acquisitions, a portfolio that at its current scale generates over $100 billion in aggregate revenue and employs approximately 200,000 people. And the second fund in that series closed in September 2025 with high demand and it was oversubscribed relative to its original targets. So these numbers tell the story about how platinum positions itself across the market cycle. And they are not waiting for the ideal market, and they are not sitting on dry powder hoping for a correction. They just deploy capital with discipline. And their operational capability means they can find value in assets that other buyers price conservatively or pass on entirely. And then there is the tariff stress test. And here's a contemporary data point that illustrates operational sophistication in real time. In 2025, four North American platinum portfolio companies each faced over $100 million in tariff exposure from the escalating trade environment. And when most PE backed companies in that position would be running to their CFO and hoping their margins held, Platinum's portfolio operations team ran real-time operational assessments across those four businesses simultaneously. And they implemented three simultaneous strategies. Number one, tariff surcharges would be passed through to customers where market structure allowed, aggressive supplier contract negotiation, and a China plus one supply chain diversification, which shifted sourcing to North America, Central America, or Europe to shorten supply chains and localize manufacturing. So the goal, which was to fully offset tariff impact through operational action and not pricing absorption, that's an operational response function that most companies and most PE firms just don't simply have. Let's shift gears and translate Platinum Equity's operational doctrine into something that you might be able to use. So whether you're an ETA searcher who's acquired, or an operations leader inside a PE backed company, or a CEO running a buy and build strategy, or someone who's just building the operating infrastructure of an organization, here are five principles that you can take directly from the M A and O playbook and apply. So the first principle is around operations diligence. It is diligence, not post-deal. So if your operational assessment of a new business, new geography, or a new product line starts after the decision is made, you're already behind. The value creation plan should be built before the commitment. And this applies whether you're acquiring a company, launching a new service line, or hiring a senior leader. Know what you're walking into and know exactly what it will take to fix it. Know the sequence. Principle two is around day one as a forcing function. So Platinum Portfolio Operations are on site on closing day. Not week two, but day one. And that's not logistics, it's a philosophical commitment to speed as a competitive advantage. So every day of operational delay is a day of value decay. Whether you're building or integrating or transforming, ask yourself, what is your day one plan? Not your 90-day plan, but day one. Principle three, the operating council structure works. Platinum's operating council investor leadership and portfolio company leadership works together with shared accountability. It's a governance model worth stealing. Most organizations separate strategic oversight from operational execution. And the operating council collapses that gap. If you're running a multi-site operational holding company or acquired division, consider building a cross-functional operating council that has both the authority to make decisions and the operational credibility to execute them. The fourth principle is add-ons as operational tools, not financial ones. So as we discuss, Platinum did 59 add-on acquisitions in 2024. And they don't acquire for the sake of deploying capital. They acquire to solve specific operational problems, adding a capability, entering a geography, securing a customer channel, or building scale in a shared service function. So the MA is downstream of the operational plan. And most acquirers get this backwards. The deal comes first, then the integration thesis. Platinum Equity builds its thesis first and uses MA to execute it. And the fifth and final principle is that exits are designed, not discovered. Their sell side team is working on exit positioning while the portfolio operations team is still doing the transformation work. And that means every operational decision is evaluated through two lenses. Does this make the business better today? And does this make the business more valuable to the next buyer? That dual lens changes how you invest, what you prioritize, and how you tell the company's story. So start thinking about your exit before you think you need to. And they state very clearly: although we have grown, we have stayed true to our fundamentals, and ultimately that's what it's all about, our ability to execute. That's Tom Gorras. 30 years in, $50 billion under management, 500 executions, and still anchoring to execution as the organizing principle. Not strategy, not financial modeling, but execution. And here's the operating insight I want you to carry out of this episode. Tom Corres grew up in the grocery store. He worked the shelves, he saw the back room, he understood from childhood that businesses are physical things. They require people showing up, products moving, customers being served, and decisions being made with the information you have, not the information you wish you had. That grocery store DNA runs through every platinum equity investment. The M A and O approach isn't a clever strategy devised by strategy consultants. It's a logical extension of a worldview that says if you want to understand a business, you have to be in it. And if you want to create value, you have to show up. And if you want to win, you have to operate. Most of what passes for private equity today is financial engineering with a thin operational veneer. Platinum is the inverse. Operational excellence with financial sophistication in service of it. The market for complex, neglected, and undervalued businesses isn't getting smaller. Corporate divesters are increasing as large organizations rationalize their portfolios in the face of macro uncertainty, terror pressures, and capital constraints. The carve-out opportunity that Tom Gores identified in 1995, buying orphan businesses from distracted corporations, is arguably larger today than it has ever been. And the operators who understand that are the ones building the next generation of great businesses. So you've been listening to Operational Velocity, I'm Gotham Basso. And if this episode landed for you, then please share it. And if you're building something in the industrial manufacturing, distribution, or technology space, and you want to talk about operational strategy or what it takes to run a buy and build, you know where to find us. We'll see you in the next episode.

SPEAKER_00 33:43

Operational velocity where execution sets the pace.