February 23, 2024
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Amgen’s $150 million investment aims to scale, diversify middle-market business

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By Mark Alfred

Special to the Business Times

Thousand Oaks-based Amgen, one of the largest biotechnology companies in the world, invested $150 million into Project Black: an Ariel Investments fund intended to transform middle-market companies into certified minority-owned business enterprises.

The fund, managed by Ariel’s private equity subsidiary Ariel Alternatives, is based in Chicago. It will invest primarily in vendors for Fortune 500 companies and provide them funding to scale while simultaneously transforming them into sustainable minority-owned companies.

“We’re trying to acquire businesses that may not be minority-owned today, that are of some size and scale that we can take over through ownership, enhance the board, enhance management — all of the above — and have those companies be certified as minority-owned companies, which can then meet the demands and needs of our Fortune 500 clients,” Ariel Alternatives’ Founder and CEO Leslie A. Brun told the Business Times.

Amgen’s investment stems from its commitment to support historically underfunded minority-owned businesses, Amgen CEO Bob Bradway said.

“Our $150 million investment in Project Black reflects our commitment to minority-owned businesses. These businesses have all too often lacked access to the capital they need to flourish,” he said in a statement to the Business Times. “Project Black is an important step toward leveling the playing field.”

Amgen is joined by 12 other partners and co-investors — including Lowe’s, Salesforce and Walmart — that are contributing a collective $1.45 billion to the Project Black fund.

JPMorgan Chase & Co is expected to contribute up to $200 million to the fund in future deals.

The joint undertaking is an effort to change how minority-owned businesses can operate and how they’re viewed, according to Brun.

“Historically, Black and brown businesses have been small businesses, providing commodity-level services,” Brun said. “We’re trying to really change that paradigm and have them viewed as more substantial, mainstream businesses that can compete on a level playing field with any other business.”

Amgen committed in 2020 to doubling its spending with minority-owned suppliers and triple its spending with Black-owned suppliers by the end of this year.

In the same year, it also joined the coalition known as OneTen, committing to hire one million Black Americans over the next 10 years.

In its own business Amgen has also made it a priority to elevate minorities to higher positions within the company. According to the company’s DEI page, 44% of minorities working at Amgen are in management positions while 32% are in executive positions. 

Amgen is also no stranger to giving to those in need, committing $1 million from its foundation arm to help those in Syria and Turkey following the devastating earthquake on Feb. 9.

“We’re really delighted at [the] partners that we have, who all believe in the same ethos that we believe in that equality is advantageous to everybody,” Brun said.

Project Black launched in February 2021 and the early closing of some financing provided the capital for the fund to acquire communication provider Sorenson in April 2022 at a $1.3 billion enterprise value. 

“We had an internal closing on Project Black before the final close; we used that capital in concert with some other financing,” Brun said.

At the time of purchase, 3% of the company’s senior leadership and board of directors were minorities, which has since jumped to 43% under Ariel’s control, the company has said.

Ariel is seeking to do the same for several more businesses it is currently scouting for, using the new $1.45 billion at its disposal. Along the way, it hopes to utilize some of the profits generated from the companies to address the inequity that exists within middle-market companies.

“We hope that in succeeding in acquiring and helping these firms develop, we will be able to take some of the benefits and wealth that is created by their activities, and pass that down through the entirety of the employee stack, to begin to address the inequity that exists within the welfare of Black and brown communities versus that of the mainstream community,” Brun said. “Take some of the benefits created by the economic engine of those companies and make certain that the employees benefit from it.”

Ariel Alternatives’ Feb. 1 announcement of the final closing of Project Black coincided with the first day of Black history month. The timing was not a coincidence according to Brun, who emphasized the commitment of Ariel and its partners to the goal of diversity, equity and inclusion.

“There really is an awfully large pool of Black and brown professionals, both in finance and business more broadly, that are very willing and very happy to compete on a level playing field and let the chips fall where they might,” Brun said. “We are not small and disadvantaged, we are no less and no more than anyone else, and more than happy to compete on a level playing field for our piece of a great American pie.”