Transaction Criteria

TYPES OF INVESTMENTS

Prospect Partners seeks to build companies from a base business.

Our primary focus is on building moderately growing companies through fostering internal growth and participating in selective acquisitions. In conjunction with strong, industry-expert management teams seeking an experienced financial partner, we also pursue “fixer-upper” or under-managed companies, and leveraged recapitalizations.

Prospect Partners has focused its efforts on the following six types of private equity investments in which we have expertise, interest, and success:

 

1. Leveraged Recapitalizations
2. Industry Consolidations
3. Corporate Orphans
4. Transitional Sales
5. Under-Managed Companies
6. Backing Outside Executives and Independent Equity Sponsors

 

Leveraged Recapitalizations

 

  Prospect Partners works with management teams and owner-operators to grow their already well-managed businesses. Frequently, entrepreneurs may encounter growth issues or risk/reward hurdles that can be alleviated through additional outside capital and a recapitalization. Acting as an outside third party financial partner, we work with current management to help build a company’s future through acquisition from a passive family or a large corporate owner.
 

Industry Consolidations

 

  In industries that offer potential for consolidation, we seek to acquire smaller, well-managed companies as a basis for future growth through subsequent acquisitions of complementary companies.
 

Corporate Orphans

 

  In some situations, growth may be stagnated by a lack of focus or inadequate support from current ownership, otherwise known as “corporate orphan” syndrome. In a scenario such as this, we partner with current management to acquire the corporate orphan from a passive family or large corporate owner.
 

Transitional Sales

 

  In situations in which the owner wants to transfer the business to the next generation of family members and/or management, we work closely to complete a transaction that meets the seller’s needs while providing opportunities for the next generation to build upon the founder’s success, and for management to share the future growth of the company. As each generational sale has unique and personal aspects, we are remain flexible and focused on individual needs to ensure a successful transition.
 

 

Under-Managed Companies

 

  Profitable companies with a defensible market niche and strong asset base may underperform earnings potential due to management or ownership circumstances that are not optimized. We seek to improve the efficiency and profits of these firms by working and investing with revitalized management.
 


Backing Outside Executives and Independent Equity Sponsors

  Outside partners, including veteran operating executives and Independent equity sponsors, often identify compelling acquisition candidates yet need an experienced, well-capitalized partner able to provide the additional resources needed to acquire and grow the business. In such situations, Prospect Partners develops co-investing relationships with these outside partners, providing capital as well as ongoing financial and strategic guidance and "best practices" perspectives that contribute to the long-term success of the business. We have high regard for the value our outside partners bring via their own skill set and expertise. In fact, we have completed more than 20 transactions with outside partners. Read about our tradition of relationships with these partners.