01
Durable Demand
Customers have a compelling reason to continue purchasing.
Lower Middle Market Acquisition Buyer
Building Long-Term Value Through Durable Cash Flow
The Buyer seeks established, cash-flowing businesses with durable customer demand, strong operating fundamentals, and identifiable opportunities for continued growth.
Acquire durable cash flow/Apply prudent leverage/Pay down debt/Grow the business/Build a long-term asset
01 / Buyer at a glance
$10–35M
Enterprise Value
$7–25M
Revenue
$2–6M
EBITDA Range
$3M+
Preferred Earnings
Deal-by-Deal
Capitalization Model
8
Initial Institutional Investor Relationships
70+
Broader Institutional Investor Network
~$3B
Aggregate dry powder represented across the broader investor network
Approximately $3B of dry powder is represented in aggregate across the broader investor network. It is not the Buyer’s AUM, personally controlled capital, committed capital, or capital available for every transaction.
Ownership
Control acquisition; generally 80%+ ownership available, with particular relevance for retiring owners considering a full exit.
Structure
A combination of non-SBA debt and equity. Seller rollover or a seller note can be considered, but neither is required.
Operating History
Established businesses with 15+ years of operating history are preferred.
Economics
Profitable companies with 15%+ EBITDA margins and meaningful growth potential.
Revenue Mix
Mission-critical services and a majority of revenue generated through non-bid work are especially attractive.
Management
An established team is valuable, but a complete management bench is not required.
02What he looks for
The Buyer Looks Beyond Revenue
02
Repeat Revenue
Contractual recurring revenue is attractive, but repeat customer behavior can be equally important.
03
Essential Services
Services that are difficult, inconvenient, or costly to replace.
04
Strong Relationships
Trusted vendor relationships and embedded customer relationships.
05
Cash Flow
Sufficient cash generation to support prudent leverage and debt paydown.
06
Established Management
An operating structure that does not depend entirely on the owner.
07
Growth Levers
Clear opportunities across customers, services, geographies, maintenance programs, or market share.
08
Fragmented Markets
Industries where consolidation can create a larger, more durable platform.
03Revenue quality
Recurring Revenue Is a Behavior, Not Just a Contract
“The Buyer does not define recurring revenue solely by whether a customer signs a contract. The more important question is whether there is a durable reason the customer will continue buying.”
01
Structurally Recurring
Highest priority
Examples
Fire and life safety · Legally required services · Essential infrastructure services
Characteristics
Durable demand · High retention · Difficult to replace · Often a relatively small customer expense
02
Trusted Recurring
Examples
Maintenance agreements · Commercial services · Long-standing vendor relationships
Characteristics
Repeat purchasing · Customer trust · Established relationships · Low switching behavior
03
Repeat Project-Based
Examples
Contractors repeatedly serving general contractors · Businesses repeatedly winning work from the same customers
Characteristics
Not always contractually recurring · Relationships create repeat purchasing behavior
04
Transactional / Commodity
Lower priority—not automatically rejected
Examples
One-time projects · Highly commoditized services · Storm-dependent residential work
Characteristics
Customers must be re-earned · Less predictable demand · Greater exposure to cycles or one-time events
04Preferred sectors
Where He Sees Opportunity
01Facility Services
02Infrastructure Services
03Utilities
04Engineering
05Electrical Testing
06Critical Power Services
07Specialty Field Services
08High-Voltage / Substation
09Commercial Roofing
10Pest Control
11Electrical Contracting
12MEP Services
13Disaster Remediation
14Data Center Infrastructure
15Semiconductor-Related Services
16Residential Property Management
Particular interest in infrastructure-related businesses and fragmented service industries where durable demand and consolidation can create long-term value.
05Geography
Geographic Focus
Primary emphasis
Texas / Texas Triangle
Dallas
Houston
Austin
San Antonio
Broader mandate
Nationwide, with an emphasis on the South, Southwest, and other growth regions. Ohio, California, and other markets remain viable where business quality and customer relationships justify consideration. Geography is a focus, not an absolute restriction.
06 / Investment thesis
The Model
The Buyer is fundamentally focused on durable cash flow. The goal is to acquire an established business, use prudent leverage, allow operating cash flow to reduce debt, continue growing the enterprise, and create a durable long-term asset.
01
Acquire Durable Cash Flow
02
Apply Prudent Leverage
03
Pay Down Debt Through Cash Flow
04
Grow the Business
05
Create a Long-Term Cash-Generating Asset
07Deal-by-deal capital model
Independent Sponsor Capital Model
The Buyer operates closer to an independent sponsor / search-fund model than a traditional committed-capital private equity fund.
- 01Identify and evaluate the acquisition opportunity first
- 02Capitalize transactions individually
- 03Work initially with approximately 8 investor relationships
- 04Approach a broader network of 70+ institutional investors when additional equity is required