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Acquisition Criteria
Company size. New England Capital Partners acquires and builds companies with experienced and entrepreneurial managers. We are interested in companies whose annual sales range is generally $3 to $30 million.
Transaction size. We seek to acquire companies with transaction prices upwards to $30 million. We can commit upwards to $10 million in equity capital per transaction, with an average equity investment of $2 million to $5 million.
Acquisition Philosophy. Depending on the needs and desires of the owners, we can either provide partial liquidity and supplement the owner with highly committed and qualified managers, or we can purchase the company outright and bring management to the company. If the owner desires to relinquish the operational control of the company, we request there be a comfortable transition period for both the seller and us.
Ongoing involvement. We acquire companies where we can add value to the future of the business. Our investment philosophy is to maintain productive, ongoing relationships with our acquired companies. We also believe that the Manager of a business should have operating control. Therefore, our role is to assist and support management through the Board of Directors, and serving as informal advisors.
The companies we seek to acquire typically have unique competitive strengths that may include:
- A loyal customer base with high switching costs, or a secure niche in their market,
- Proprietary products or processes,
- Secure distribution channels,
- Products with proven market acceptance, including brand name products
We target solid, established companies that are in transition. Owners may want to transition into retirement, or, they may require additional funding and management energy to take advantage of growth opportunities. We seek to acquire stand-alone, privately held companies or corporate divestitures whose performance can be improved through managerial and financial resources, and a supportive investor group.
We prefer to acquire companies where there is evidence of a clear channel for sales expansion, whose market share can be improved in a concentrated industry, or companies that have, or can reach a leadership position in a fragmented market. We prefer companies with staple products or services, not subject to fashion or rapid technological change.
We prefer opportunities in Distribution, Business Services, and Manufacturing and Consumer Products industries.
We are interested in companies whose future performance is supportable by historical information. The company should have a history of profitability and a relatively clean balance sheet. However, we will entertain break-even or unprofitable situations where there is evidence of progress, clearly identifiable problems and management expertise to correct those problems.
We prefer companies in the New England states, but will consider companies in other regions if they are a particularly good fit with our criteria, and they are conveniently accessible.
