Capitol Partners has been implementing its 'platform investment' strategy
in high-growth, yet fragmented, segments of industries in which the use
of information technology can support a differentiated competitive strategy
for providing either a scale-intensive, low-cost product-service in which
scaled technology reduces per unit costs or a high value-added, premium
product-service in which technology expands and deepens the product-service
Capitol Partners is attracted to the health care service industry given the sector’s strong long-term growth drivers. The firm has focused on particular niche segments of the industry advantaged by favorable demographic, technological, and cost characteristics. The core growth in this sector is complemented by the opportunity for growth from the acquisition of the numerous small competitors in this fragmented industry.
Similar to the firm's investments in the health care information technology sector, Capitol Partners is attracted to the Internet space because it offers a combination of high core industry growth, high operating leverage, and the availability of acquisitions for complementary growth.
Capitol Partners is also pursuing its 'platform investment' approach in
industries requiring heavy infrastructure investments like the telecommunications
and energy sectors. Similar to its investments in information technology
sectors, infrastructure-based industry segments offer high operating leverage
and create significant incremental cash flows as well as barriers to entry
for those who are able to grow quickly. Investments in these segments
traditionally are larger, they have a larger debt component, and they
involve companies further along in their life cycles.
As the communications marketplace continues to consolidate and service offerings blur previous distinctions, Capitol Partners is well-positioned to capitalize on opportunities to compete in this changing marketplace by leveraging its information technology- and infrastructure-based investment experience.
The changing environment in the energy and basic industries presents attractive investment opportunities for Capitol Partners to find orphaned, niche, or non-strategic assets that may not be a fit for their current owners, but could benefit from participation in a focused, scale-driven strategy with a specific strategic focus and possible liquidity-enhancing transactions.
What is our overall strategy?
What type of opportunities interest us?
How do we typically structure transactions?