|Company Size||We are interested in companies whose annual sales range from $5 to $50 million with a cash flow of approximately $1 to $5 million.|
|Transaction Size||We seek to acquire companies with transaction prices upwards to $40 million. We can commit upwards to $10 million in equity capital per transaction, with an average equity investment of $2 million to $5 million.|
|Industries||NECP prefers opportunities in Manufacturing, Business Services, Distribution and Consumer Oriented industries.|
|Geography||We prefer companies in the New England states, but will consider companies in other regions if they are a particularly good fit with our criteria and they are conveniently accessible.|
Types of Transactions.
We target solid, established companies that are in transition. Owners may want to transition into retirement or they may require additional funding and management energy to take advantage of growth opportunities.
Depending on the needs and desires of the owners, we can either provide partial liquidity and supplement the owner with highly committed and qualified managers, or we can purchase the company outright and, if necessary, bring management to the company. If the owner desires to relinquish the operational control of the company, we request there be a comfortable transition period for both the seller and us.
Our investment returns come from long term improvement in free cash flow, not quick exits. We will therefore consider companies that may not fit the classic private equity fund ownership model because of limited exit alternatives, management transition, financial constraints or some other internal factor.
Types of Companies
The companies we seek to acquire typically have unique competitive strengths that may include:
NECP prefers to acquire companies where there is evidence of a clear channel for sales expansion, whose market share can be improved in a concentrated industry, or companies that have, or can reach a leadership position in a fragmented industry. We prefer companies with staple products or services, not subject to fashion or rapid technological change.
We are interested in companies whose future performance is supportable by historical information. The company should have a history of profitability and a relatively clean balance sheet. However, we will entertain break-even or unprofitable situations where there is evidence of progress, clearly identifiable problems and management expertise to correct those problems.
We acquire companies where we can add value to the future of the business. Our investment philosophy is to maintain productive, ongoing relationships with our acquired companies. We also believe that the Manager of a business should have operating control. Therefore, our role is to assist and support management through the Board of Directors, and serving as informal advisors.
Copyright 2010 New England Capital Partners