DFW Capital Partners focuses its investment activities on making control investments in lower middle market companies – generally defined as businesses with annual revenues of $20 million to $100 million and annual EBITDA of less than $10 million.
We believe this segment provides an outstanding source of investment opportunities. In this segment we are able to bring significant value to portfolio companies through improvements in financial management, business strategy, strategic acquisitions and exit planning.
Properly executed, this investment approach can lead to above-average revenue and earnings growth, as well as expansion in enterprise value multiples upon exit.
Our approach is long term. We identify key strategic growth areas, assist in the recruiting of senior executives, identify and support add-on acquisitions, and provide access to both private and public capital.
DFW’s investment strategy includes three key elements:
- Acquire platforms for transformation;
- Professionalize for growth;
- Build for exit.
Our investment structure generally involves:
- Recapitalization of entrepreneur-led or family-held businesses where the selling shareholders maintain a significant minority equity stake;
- Acquisition of under-managed or non-core divisions of larger private or public companies;
- Growth investments to support a de-leveraging or a key add-on acquisition program.
We professionalize our portfolio companies by:
- Recruiting professionals to fill key management and operating positions;
- Improving financial and operating reporting systems and budgeting tools;
- Standardizing the strategic, tactical, and financial planning process;
- Instituting professional management practices.
We build our portfolio companies for exit by:
- Aggressively growing revenue and EBITDA, which frequently results in multiple expansion at exit;
- Building organically, with professionalized and highly focused development efforts;
- Identifying, structuring, and executing strategic add-on acquisitions;
- Continuously evaluating and refining exit strategies.
Our portfolio companies are typically sold to strategic or financial buyers for cash.