Transaction types: we prefer to acquire control positions but will consider minority stakes alongside the right partners as well. We can also provide capital to help a company restructure its balance sheet and reduce leverage.
We look for manufacturers of proprietary designed, mission-critical components. We avoid manufacturers of capital equipment and instead favor companies with recurring demand drivers (e.g. replacement parts or consumables). As with our other industries of interest, we’re looking for differentiated players in small and fragmented niche markets. We seek to add value by investing in efficiency improvements and addressing new markets through organic expansion and acquisition.
An example of a past investment in this industry is a manufacturer of composite plastic parts for a variety of end markets.
This category includes SaaS businesses as well as traditional people-based business services. We look for companies providing critical recurring services for their customers with high gross margins and a strong track record of customer retention. We avoid companies that are providing a commodity service and competing primarily on price. As with our other industries of interest, we’re looking for differentiated players in small and fragmented niche markets. We seek to add value by investing in efficiency improvements and addressing new markets through organic expansion and acquisition.
An example of a past investment in this industry is a technology-enabled provider of claims administration services to the workers’ compensation industry.
We look for companies that provide a functional recurring service for their customers with high gross margins and a strong track record of customer retention. We avoid companies that rely on fashion-driven consumer preferences (e.g. entertainment, leisure, design). As with our other industries of interest, we’re looking for differentiated players in small and fragmented niche markets. We seek to add value by investing in efficiency improvements and customer experience and by addressing new markets through organic expansion and acquisition.
An example of a past investment in this industry is a swimming pool service company.
• $1-7mm of EBITDA
• Consistent historical profitability:
• Gross margins: 35-40%+ in manufacturing; 50%+ in services
• EBIT margins: 15%+
• RONA: 20%+
• Differentiated players in small and fragmented niche markets
• Recurring, long-term customers with revenue visibility (not project based)