We are interested in investing in businesses that will create value. This involves businesses that have significant growth potential or have been poorly managed and may be able to be turned around. We also believe strong management with industry-specific operating experience is necessary with any business in which we will consider investing.
As long as experienced management is involved, we will consider start-ups, management buy-outs, distressed sales, turnarounds, etc. We want to partner with management and thus, we want management to invest in the business, if possible. We are also willing to provide “sweat equity” to management teams in special situations. We also are control investors since generally we put in the majority, if not all, of the capital in the business.
We are primarily interested in businesses that allow us to invest $3 million to $25 million of our capital, although we have the ability to do larger transactions. We generally would finance any transaction with some amount of debt, but this is not a necessity for us. We are not constrained by time horizons and exit strategies that most Venture Capital and Private Equity funds have. We are happy to buy and hold indefinitely if the business continues to perform.
Industries that we would be looking for investment opportunities include:
- Distribution, both wholesale and value-added or niche
- Industrial and specialty business services
- Maintenance and repair businesses
- Business Franchises
An ideal investment for us is a company and owner/manager with a reasonably profitable business (greater than $3 million of EBITDA) that is scalable but needs a long-term capital partner that can help the business grow and become a market leader.
Industries we do not likely have an interest in:
- Real estate or real estate intensive
- Information technology
- Speculative technology, biotech or anything with uncertainty regarding proof of concept of regulatory approval