Private equity groups are firms that buy shares of stock or entire businesses that are not publicly traded. There are a few thousand that invest in US-based companies, and each have their own investment style, criteria, method of investing (providers of growth capital, management buyouts, turnarounds, etc.), and industries and sectors of interest. What the majority have in common is that they invest in mid-market companies or larger (most want to see a minimum of $20 million in revenue). Because of this, some small business owners are surprised when I, as a business broker, suggest that pursuing private equity buyers will be part of a comprehensive business marketing strategy. Codiligent has done significant research to determine which private equity groups are willing to invest in small companies (defined as less than $20 million in revenue), and their acquisition criteria. As a result Codiligent has about 300 private equity groups in its database. Following is a brief description of some of these firms’ criteria. If you are thinking of selling a business with less than $20 million in revenue and want a business broker who will get maximum exposure for your business to appropriate buyers, consider calling Codiligent business brokers to discuss your situation.
Private Equity Group #1000007147
This firm is looking for manufacturing, distribution, and services businesses throughout the USA with $5-75 million in sales and $1-5 million in EBITDA. Other things it looks for are: a proven product or process; long term growth prospects either organically or through acquisitions; and management’s desire to build the business’ infrastructure into an industry leader. This private equity group is not interested in healthcare, technology, or real estate.
Private Equity Group #1000005055
This group is looking for businesses with $2-20 million in revenue, with minimum gross margins of 40% and minimum EBITDA margins of 12%. Other criteria include: industrial or commercial customer base (no consumer products); proprietary or unique technology (no commodities); three years of sales and profit growth (no turnarounds/startups); national and/or international market; and unrealized growth potential. In particular, it is interested in light manufacturing and distribution businesses. It is NOT interested in consumer products.
Private Equity Group #1000004694
This private equity group is looking for businesses in a variety of industries located throughout the USA that have $5-50 million in revenue, and at least $1 million of cash flow. Other things they look for include: capable management and/or reasonable owner transition; and defensible niches with opportunities for significant growth.
This company seeks businesses located in the Western USA with $3-50 million in revenue and $1-5 million of EBITDA. Other criteria include: organic and/or acquisition growth potential; strong management team; highly differentiated business model, products and/or services; strong market position with identifiable barriers to entry; and limited customer concentration. They are interested in the following industries: retail; consumer products and services; business services; healthcare services (especially skilled nursing facilities); education and training services and products; light manufacturing; and value added distribution.
Private Equity Group #1000000308
This firm is looking for businesses with $7-25 million in revenue, and $1.5-5 million in cash flow. Not interested in manufacturing. Prefer business services such as data services, safety services, transportation services. Looking for outgoing or retiring owners. Geographically: CA, WA, OR, CO
Private Equity Group #1000002648
This group is interested in businesses with revenue from $10-250 million, and EBITDA of $1-25 million located throughout the USA in the following industries: aerospace & defense; business-to-business services; commercial manufacturing and distribution; consumer products (including both branded and private label); energy; healthcare and medical device manufacturing; industrial equipment; logistics and transportation; media and communications; and security infrastructure manufacturing and services.
Private Equity Group #1000007156
This company is looking for businesses throughout the USA and Canada with $2-100 million in sales with historical operating margins exceeding 10% in the following industries: meat products, specialty printing, wellness centers, bathware, and specialty health networks. Additional criteria include: predictable future cash flows; a proven model, with product acceptance and strong market position; measurable earnings growth opportunities through acquisitions, organic growth, lean manufacturing and other cost improvements; a broad, talented management group; and makes use of professional resources.
