Narrow Sector Focus Partner with Like Minded, Successful Management Teams An Operator’s Mindset Investor Friendly Transaction Flexibility
We focus exclusively on home service and specialty business service companies that have several of the following characteristics: route-based logistics, a key or differentiated asset, essential service, local or regional operations (often with a warehouse), rental or recurring revenue streams, and strong local brands.
Examples of businesses we target include:
- Home Services: HVAC, electrical, plumbing, waste, pest control, remediation, security, moving and storage, specialty rental.
- Specialty Business Services: Specialty distribution, niche logistics, waste, port equipment, commercial cleaning, specialty rental.
These businesses are essential service providers, often founded by entrepreneurs, and staffed with hard working employees. Some people have even labeled them “blue collar services” and we are just fine with that. This is what we know. We concentrate our efforts in these areas because we possess deep domain expertise and proven experience in these types of business models.
We prefer businesses with relatively low capital intensity but we are comfortable if the capital deployment leads to a significant competitive advantage and drives a good return on investment. We avoid companies with customer concentration, extreme cyclicality, significant regulation, or unknown technology risks.
We believe great service companies share several attributes: a strong commitment to employees, an intense focus on delivering a superior customer experience, a solid plan that defines future success, and a drive to execute and continuously improve. We seek to partner with management teams that share these beliefs and are committed to building great companies.
We seek partner companies with a strong track record of success. This includes being well-positioned in their respective markets and demonstrating a pattern of profitable growth. We do not partner with startups or companies needing a major turnaround.
We enjoy developing close, collegial relationships with owners and management teams and collaborating on building even more successful enterprises. We seek situations where we can get to know the management team and the management team gets to know us – and comes to see us a partner as much as an investor. We aren’t in a rush to do this, and believe that a longer period of time to get to know each other is beneficial to both parties. In addition, we encourage our potential company owners and CEOs to talk with anyone we have worked with – we are very proud of our long-term relationships and believe that they will gain a good understanding of how we operate.
As true partners, we encourage open communication, transparency, and a commitment to prompt decision-making.
Our partners have over nine decades of experience, including as Division Leader, President, CEO, and Chairman of private and public companies. We are operators at heart and not only understand the challenges in building and growing successful companies but truly enjoying working to do so. We are comfortable rolling up our sleeves and pitching in to solve complex, challenging problems facing our management teams.
We work closely with the management team to develop a long-term strategic plan that includes employee and organization development, initiatives to improve the customer experience, process improvements to further operational efficiency, necessary investments in technology, potential acquisition targets, and a top-level financial plan that is aligned with our investors’ expectations. We do not believe in setting far flung, ”moon shot” goals with no real means to achieve them. Instead, we set goals that are realistic and achievable.
Our partner company management teams develop annual operating plans and budgets that are clearly linked to the strategic plan. Then, we empower them to execute the plan. We do not micromanage but are always available to help when challenges arise. We assist our management teams in their inorganic growth efforts by leveraging our expertise in sourcing, evaluating, negotiating, and integrating add-on acquisitions.
Continued investment is often required well after the initial acquisition. We ensure appropriate capital is allocated to build key organizational capabilities in human resources, the customer experience, and other growth initiatives. Funding is sourced for any bolt-on acquisitions.
We afford our investors the opportunity to deploy their capital on a company-by-company basis. We provide them comprehensive due diligence and allow them to pick and choose where to invest.
We have a deep group of investors with whom we work, including insurance companies, foundations, other institutions, large family offices, and strategic high net worth investors (many of which also have specific similar industry expertise). These investors share our sense of partnership and patience.
We are creative, strategic, and flexible in our investment approach allowing us to structure transactions to meet the specific needs of companies and their owners. Looking for control equity but open to structured equity, we will consider a number of different transaction types, including:
- Recapitalizations
- Management Buyouts
- Family Succession Planning
- Corporate Divestitures.
We seek management teams who want to invest alongside us. We also establish equity incentive plans, thus ensuring that we and management are well-aligned for the investment journey.
We welcome ideas from investment bankers and other deal intermediaries and are willing to pay buy-side fees on mutually-agreed upon terms. With our intermediary partners, we work quickly and efficiently.