Company Size. We focus on companies with EBITDA (earnings before interest, taxes, depreciation & amortization) between $2MM and $7MM either in the current year or based upon a reasonable forecast for the coming year. We will co-invest in larger companies where our Roundtable can be additive. We will also consider investments in smaller companies within our immediate region.
Investment Amount. We look to invest between $2MM and $15MM per company. Larger amounts are possible through co-investment with our Roundtable partners or other firms.
Start-Ups. We do not invest in start-ups. We are pleased to hear from entrepreneurs pursuing excellent new ideas, and will sometimes look over their shoulders with a view to investing when the business approaches our size parameters.
We look for the following general characteristics:
Competitive advantages that are sustainable over the long-term.
Excellent management teams.
Superior returns on internally-invested capital.
While not a requirement, we prefer investments:
With the potential to last a long time – i.e. over 10 years.
Made in partnership with management teams or existing owners.
We consider investments whose primary operations are located anywhere in North America. Given our central location, we are particularly active between the Appalachian and Rocky Mountains.
Illustrative industry groups of interest:
Differentiated manufacturers (e.g. niche markets, unique products or processes)
Branded consumer products
Recurring-revenue service businesses
Differentiated distribution businesses
Illustrative sectors where we are unlikely to be a good fit:
We acquire controlling interests in companies, often in partnership with existing or new management teams. We work with sellers and their advisors to structure transactions optimally for mutual advantage. We participate in auctions and negotiated processes alike.
We also make minority investments, whether in recapitalizations to provide liquidity to existing owners or in the form of new growth capital. Since we are not passive investors, we do not take minority positions unless they are meaningful enough for us to be able to make a positive difference.
We will join as co-investors behind others who share our basic values. Similarly we welcome co-investors who add value to transactions led by us.
We have the ability to provide deep mezzanine capital where doing so meets the needs of the parties better than equity. By “deep” we mean subordinated debt or preferred equity that contains few if any restrictive covenants, accompanied by an appropriate level of participation in the company’s upside.