Moderate-to-high growth, which will enable properly capitalized and well-positioned companies to simultaneously benefit from both operational improvements as well as industry growth.
High operating leverage or scalability, which provides an opportunity for significant cash flow generation through incremental operational improvements given their relatively high fixed costs, yet low variable costs, as well as support for greater debt-leverage for added equity returns.
Large and fragmented industry, which affords an opportunity for the target companies to act as 'platforms' and enhance their internal growth with acquisitions and ultimately create significant economies of scale.
The combination of all three industry characteristics creates a unique investment opportunity wherein a well-capitalized 'platform' company, led by a seasoned management with clear vision and a successful performance record, can reap significant upside.
Capitol Partners will focus on companies with the following basic attributes:
Strong management team with both a clear vision and a successful performance record, which will provide the appropriate management experience and industry expertise to effectively and efficiently implement the 'platform investment' strategy while maximizing shareholder value.
Well-established, yet diversified, customer base, which mitigates the risk of customer hold-up and consequent appropriation of value.
Well-recognized brand equity, which limits market risk by reducing the cost of acquiring and maintaining customers and affords the opportunity to grow the business incrementally by leveraging off the brand.
Privately-held, which allows for the pursuit of private-public enterprise valuation differentials, enables Capitol Partners to leverage its financial and managerial capabilities, and permits the transaction to be closed in a more timely manner.
The combination of these portfolio company characteristics with Capitol Partners' financial and managerial support creates significant value for sellers, management and investors.
What is our overall strategy?
Which industry segments are our primary focus?
How do we typically structure transactions?