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Management
Management is the single most important element of any business. We seek to partner with owners and managers who have proven track records and exhibit a desire to repeat and improve upon past successes. We look for owners and managers with clear visions for growth and the ability to implement ambitious plans. Providing our owners and/or senior managers with attractive compensation programs and incentive-based options is an integral part of our investment philosophy. Generally we prefer opportunities with continuing management, however with our Executive in Residence (“EIR”) program we can also make investments in companies which have owners and managers looking to transition out of the business.
Growth
In our view, the most attractive investment opportunities consist of businesses that have shown consistent historical growth. As an investment partner we work with management to continue that growth and help find ways to accelerate it. Financial Criteria - Businesses with continuing management:
- Cash Flow: $2m - $20m - Businesses with management transitioning out:
- Cash Flow: $2m - $10m
Key Business Characteristics - Stable or recurring revenue
- Identifiable growth opportunities
- Sustainable margins
- High returns on invested capital
- Significant barriers to entry
- Simple, understandable businesses
- Non-cyclical industries
Industry Preference
Industry preference remains our least-critical deal evaluation parameter. Management and specific business characteristics will almost always serve as the primary metric for judging potential opportunities. However, we do have a particular interest in the following sectors: - Alarm Monitoring
- ATM Operators
- Consumer Products
- Consumer Finance
- Direct Marketing
- Document Storage/Management
- For-Profit Education & Training
- Gaming Equipment & Service
- Insurance Brokers
- Niche Software
- Professional Employer Organizations (PEOs)
- Specialty Retailers
- Wealth Management
Investment Structure
Our flexibility goes hand in hand with our desire to build a meaningful partnership. We seek to structure deals that meet the objectives of all parties involved. Previous deals have included compensation in the form of cash, earn-out, seller note, equity rollover and profit sharing. Transaction structures have included majority and minority investments in the form of asset purchases, stock purchases and recapitalizations. We are particularly experienced in creating a structure that minimizes taxes and align the incentives of owners, managers and employees. |
