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Investment Criteria

The table below outlines the numerous criteria that we use when evaluating a business. These criteria are a general guide that we use for evaluating businesses and not a set of absolute requirements for our investments.

Company

  • Recurring revenue with durable competitive advantages
  • Minimum three-year history of profitable growth
  • Loyal and diverse customer base with high retention rates
  • Strong middle management team and culture that values quality and teamwork
  • Readily identifiable growth opportunities

Financial

  • Revenues ranging from $5 to $50 million
  • Stable and recurring cash flows of at least $1.5 million
  • Minimum operating margins (EBITDA) of at least 15%
  • Limited capital expenditures and working capital requirements

Industry

  • Fragmented niche industries
  • Growing markets
  • Low external risk factors
  • Low cyclicality
  • Representative industries include:
    • Healthcare services
    • Light manufacturing
    • Energy services

Context

  • Owner/operator seeking to retire without clear successor
  • Company in need of additional management and/or board expertise to capture long-term growth opportunities
  • Owner/operator in need of liquidity and wishing to diversify personal net worth

 

 


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