Direct, Control LBO Transactions
- Revenue of at least $15 million for the two prior years and up to $150 million or more
- EBITDA of at least $5 million for the two prior years and up to $25 million or more
- Gross margins in excess of 25%
- EBITDA margins in excess of 10%
- Strong management
- History of strong, consistent revenue and earnings growth
- Attractive future growth prospects
- Defensible market positions
- High returns on capital
We do not have a specific industry focus, but generally invest in manufacturing, business services, financial services and consumer businesses. We have experience in a broad range of industries including, but not limited to:
- Food and food ingredients
- Environmental and industrial services
- Specialty manufacturing
- Valued-added distribution
- Specialty building products
- Financial services
- Specialty chemicals
While we have experience investing in Europe and Asia, we currently focus our control investments on businesses headquartered in North America. Our goal is to partner with management to take a business to the next level of success. We prefer investing in situations where management and/or the selling shareholders wish to reinvest with us.
In most cases, the co-investments in which we participate meet the same criteria suggested above for control investments. However, we will consider a wider range of industries and deal types provided the co-investor with whom we are partnering brings value-added industry expertise and relationships. In partnership with other like-minded and value-added investors, we will consider growth capital and special situation opportunities.
While we focus on direct investments and co-investments, we will selectively consider investments in funds. The primary metric by which we judge funds is our assessment of their ability to generate attractive risk-adjusted returns. We believe the best predictors of this ability are:
- Disciplined, consistent investment process
- Focused strategy
- Strong, motivated team with minimal turnover
- Consistency of returns across investments
We prefer teams that have worked together for a long period of time, but will occasionally consider first-time funds. We invest selectively in the following types of funds: LBO, growth capital, mezzanine, special opportunity and secondaries. We have a strong preference for investing in funds that will provide us with the opportunity to make significant co-investments.
We look forward to discussing new investment opportunities with you and promise a prompt and confidential reply.
Intermediaries & Deal Sources
Brookside Equity Partners has relationships with investment bankers, business brokers, and other intermediaries throughout North America. We work with both sell-side and buy-side intermediaries. We are happy to negotiate buy-side fee agreements on a deal-by-deal basis.
We also work with and back operating executives who identify a transaction in which they can play an active role and help drive value.
We look forward to discussing new transactions with you and promise a prompt and confidential reply.
Brookside Equity Partners and its co-investors actively seek add-on acquisitions for their existing portfolio companies. The size and financial criteria that apply for new platforms do not apply for add-on opportunities. We currently seek add-on opportunities in the following industries:
- Electrical Products Distributors and Manufacturers
Ideal acquisition candidates are distributors and manufacturers of branded electrical components used for construction (residential and commercial), maintenance, and repair applications. We prefer for the acquisition target’s products to be ranked among the top 3 products within each of their respective markets. Alternative structures to an acquisition, including royalty interests, may be acceptable. No revenue minimum for either distributors or manufacturers is required.
- Furniture Designers, Manufacturers, Importers and Distributors
Ideal acquisition candidates include residential furniture designers, manufacturers, importers and distributors. We will consider situations where management/owners wish to retire or take more passive operational roles. Strong competitors within a particular residential furniture niche with broad customer relationships are ideal. Alternative structures to an acquisition, including royalty interests, may be acceptable. Revenue in the $5-$40mm range is preferred, but not required.
- Environmental Compliance Providers
Ideal acquisition candidates will provide environmental compliance services to customers in the downstream energy and petrochemical industries. We will also consider providers of similar services to the midstream and upstream energy companies industries. Finally, we will consider providers of leak repair services to the same customer base.
- Rehabilitation and Wellness Products
Ideal acquisition candidates manufacture and/or markets rehabilitation and wellness products sold into a clinical markets, including but not limited to physical therapy, occupational therapy, chiropractor, personal/fitness trainer, and physicians.
- Food Flavorings and Food Ingredients Manufacturers
Ideal acquisition candidates are manufacturers of food flavorings and/or specialty intermediate food ingredients. We will consider companies focused on dry and liquid flavorings for either food or beverage products. Manufacturers of branded food products are not an ideal fit. Minimum revenue of $3 million required. We no longer have a platform company in this sector, but would evaluate investments in companies that do not meet our trandition size minimums.