Source Capital: Professionals


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Introduction

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Source Capital, LLC was established to make equity investments in mature, private “small-cap” companies with EBITDA of at least $1.5 million. Investments are primarily in the form of management-backed leveraged acquisitions, recapitalizations and growth financings. Our emphasis is on value creation through growth, business development and operational improvement rather than through financial engineering or excessive leverage. We partner with exceptional management teams who are excited about the growth potential of their businesses and seek a financial partner to accelerate future expansion and drive strategic and operational improvement. Our financial resources and expertise are used in tandem with the efforts of a professional management team to increase a business' competitive position, scale and level of profitability.

Investment Criteria

Transaction size:

Companies with trailing cash flow (EBITDA) of at least $1,500,000. Exceptions will be made for distressed businesses that have a history of operating at or above this level.

Management Criteria:

Management is the key component of any business, and we are actively seeking experienced owners and managers who are eager to partner with us to grow their businesses. Although we prefer investments where management is remaining, we will selectively consider other situations. Our philosophy is to align financial interests with top managers through attractive incentive-based compensation programs.

Investment Model:

We take an innovative and flexible approach to investment structures. Previous structures have included leveraged buyouts, management backed acquisitions, platform acquisitions, growth financings, family management buyouts (estate planning), and distressed acquisitions. Investments are usually made on a controlling basis. We will selectively review non-controlling opportunities for high-growth companies. In all cases, Source Capital prides itself on its ability to rapidly close investments and to create structures that align the interests of all parties.

Industry focus:

Our flexible industry focus includes business services, distribution/supply, healthcare, and light manufacturing. In addition, we are always interested in businesses that are complementary to our portfolio holdings. At present, this includes: (i) heavy equipment rental; (ii) ambulance businesses (particularly those with a “non-emergency” focus;) (iii) Manufacturers of storage items (i.e. sheds), furniture, play sets and other large items to be built or installed in the “backyard”; (iv) metal and plastic hardware and accessories for use in the apparel business; (v) coffee roasters, wholesalers and retailers; (vi) businesses that serve the nuclear power industry including waste processing and storage; and (vii) outdoor sports including surf and skate.