Firm Overview

Cardinal Equity Partners is a multi-family owned investment firm with a mission to acquire controlling interest in a small number of middle-market businesses located in the eastern half of the United States.  With over 20 years of experience in acquiring and building middle-market businesses, we have a demonstrated track record of utilizing our collective operating, marketing, and financial backgrounds to help management teams grow and build companies of value.  As private investors utilizing our own capital, we do not have the same liquidity pressures that a Fund-based investor has, thereby allowing us to view each of our investments as a long-term commitment towards building an enduring, profitable business.

Our goal is to partner with management teams in the acquisition of niche manufacturing, value-added distribution, or service companies that have a positive financial history and that exhibit the potential to grow either organically or through acquisition.  While the principals of Cardinal all have previous operating experience, our role is to serve as active Board members and advisors, assisting exceptional management teams in building their businesses by ensuring that they have the financial and human capital resources necessary to execute agreed upon business plans.

Why Partner With Cardinal Equity Partners?

Family Capital

Unlike traditional institutionally funded private equity groups, Cardinal invests our own equity and that of several other like-minded investors. We are driven by the desire to own a small number of businesses that can be held for long term value creation, not by IRR mandates. As such, management teams are empowered to make decisions that serve the long term interests of the company, its customers, and its employees.

Broad Industry Expertise

Below is a sampling of the industries we have knowledge of through direct investment experience or from significant operating history:

  • Consumer Package Goods
  • Recreational Vehicle
  • Marine Products
  • Horticulture Distribution
  • Specialty Pharmacy Distribution
  • Publishing
  • Healthcare Services
  • Outdoor Furniture
  • Water Treatment
  • Durable Goods Distribution
  • Financial Services
  • Audio Products
  • Home Improvement
  • Pet Products
  • Glass Fabrication
  • Subscription Based Businesses

Deal Experience

With over 20 years of experience in acquiring businesses, we have the expertise and advisor network to quickly and efficiently close transactions. Cardinal’s day to day activities are managed by 3 principals who make transaction decisions quickly and who have extensive experience in analyzing all types of businesses.

Flexibility

Because our funding is from individuals and families rather than institutions, Cardinal Equity Partners can be extremely flexible with transaction structures in order to meet the unique needs of selling shareholders. This flexibility has made Cardinal one of the Midwest’s preferred purchasers of family owned businesses.

Operating Experience

Each of the Principals of Cardinal has prior experience serving in operating roles. Because of that experience and our long history of partnering with entrepreneurs and helping them successfully take their business to new levels, we understand the challenges that confront a growing business. That same history allows us to be a valuable resource for our management teams when the next challenge arises.

Operational Control

We believe that our primary role is to aid our management teams in making major strategic decisions and to ensure that they have the resources necessary to achieve our agreed-upon short and long term goals. Because we believe that the day-to-day management team is the key determinant of success, we strive to provide significant ongoing support without micro-management. In addition to helping develop strategic and annual operating plans, we will provide assistance on major personnel decisions as well as playing a significant role in executing material financial events such as acquisitions and divestitures.

Equity Participation

Because we view management teams as partners and not employees, we believe in providing significant equity incentives to our management teams. We also invite our management teams to invest along with us at the beginning of a relationship.

Conservative Capital Structures

While we may leave some investment return on the table, our investment philosophy is to create capital structures that have sufficient amounts of equity and proper levels of debt to produce a balance sheet that has financial strength and strategic flexibility. We are fond of saying that banks usually want to lend us more money than we want to borrow.

Investment Philosophy

Cardinal Equity Partners seeks to invest $2 million to $10 million of equity capital in situations that fit all or most of the parameters listed below. For transactions requiring higher amounts of equity, we will partner with other investors who share our patient capital mentality.

 

Transaction Types

  • Recapitalizations where the owners of a closely held business wish to take some “chips off the table” while continuing to retain a significant level of ownership and management responsibility. Cardinal Equity Partners will join forces with the owner to help grow the company and create further value allowing him or her a “second bite of the apple.”
  • Management Buyouts where an existing management team wishes to buy out retiring or absentee owners. In this type of transaction, the management team will invest personal funds for an equity stake, and Cardinal Equity Partners will provide the balance of the capital and allow management the ability to earn additional equity through performance and time-based incentives.
  • Family Legacy Situations where an entrepreneur wishes to realize the financial rewards of his or her successful business while providing meaningful management roles and financial opportunities for the next generation.
  • Divestitures and Spin-offs of divisions, subsidiaries, or product lines. Many times a division or subsidiary cannot reach its full potential until it is operating under the guidance of a focused, entrepreneurial management team.

Financial Characteristics

  • Annual sales between $5 million and $50 million.
  • Annual EBITDA between $1 million and $5 million.
  • Historical pattern of revenue growth.
  • Minimum 3 years of positive cash flow.

Company Characteristics

  • Midwest headquarters.
  • Niche manufacturer, value-added distributor, or service business.
  • A value-added business model, either through unique products, proprietary distribution channels, or strong branding.
  • Growing industry or underserved niche of a large market.
  • No major customer concentration.
  • Repetitive revenue streams.
  • Proven management teams.

For Business Owners

We realize that selling your business is an emotional process that requires a great deal of thought and introspection. We have sold businesses ourselves and know the stress that can ensue as you move through the process of finding the most appropriate buyer or investor. Allowing Cardinal Equity Partners an opportunity to learn about your business is viewed as an honor, and we take it very seriously. As such, we will commit to you the following:

Complete Confidentiality

We are happy to sign traditional non-disclosure agreements (a standard one can be downloaded below) and treat all discussions in the strictest of confidence. We understand the turmoil that can result with employees or competitors as a result of breaches of confidence and will do our utmost to assure complete discretion.

Complete Honesty

We are hoping you will be honest with us as you expose us to your business. We think it is only fair to be honest with you in how we think about the business or potential transaction.

Fast Turnaround

Our commitment is to make an informed, speedy decision about whether we should invest in your company. With a small number of decision makers, our process is efficient and does not get bogged down waiting for large investment committees to reach a consensus.

Complete Integrity & Respect

We sincerely believe our most important asset is our reputation and will do whatever it takes to maintain it. That means treating you and your management team with respect and ensuring that we always fulfill our commitments.

Click here to view and download our confidentiality agreement.

For Intermediaries

Cardinal Equity Partners understands the critical role an intermediary can play in the sale or recapitalization of a business. We rely heavily on intermediaries for opportunities to view businesses for sale, as well as for assistance in occasionally selling our own investments. As such, we recognize the value you bring to the deal process.

Our guiding principles in regard to intermediaries:

  • We will gladly pay standard buyer fees (Lehman formula) if agreed upon in advance and where the seller is not obligated to compensate the intermediary.
  • We will give you a very fast response on new opportunities (our goal is one week or less). If we are not interested in a particular transaction, we will strive to give you other ideas of groups or individuals that may have greater interest.
  • We will be professional in our approach to your client and respectful of your time, striving to put all material requests in written and organized form.
  • We will keep you informed as we progress through the due diligence process, informing you immediately of any “deal breaker” issues.
  • If the intermediary is a service provider to the seller, we will strive to retain that relationship post-closing.
  • We will only issue Letters of Intent in situations where we are confident that we can close the transaction. We have never been in a situation where we could not close a transaction due to our inability to get financing.

Click here to view and download our confidentiality agreement.

Our Team

Utilizing over 20 years of our collective operating, marketing, and financial backgrounds to help management teams grow and build companies of value.

News & Press Releases

2016
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2015
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2014
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2013

Cardinal Equity Partners Completes the Recapitalization of Corporate Imaging Concepts, December 2013

Indianapolis, IN (December 18, 2013) – Cardinal Equity Partners, LLC (“CEP”), is pleased to announce that it has completed the recapitalization of Corporate Imaging Concepts, LLC (“CIC” or the “Company”), a leading provider of branded promotional products and online store portals.  Founded in 1996 and based in Northbrook, Illinois, the Company offers a comprehensive set of services that have made it the single-source solution for national and global customers in a range of industries including healthcare, human resources management, manufacturing, distribution and technology.  Driven by its proprietary LEIF™ technology, the Company ranks within the top 1% of the promotional products industry.

Brian Abrams, CIC founder and CEO, remains a significant shareholder and will continue in his role as the Company looks to accelerate its impressive growth trend.  According to Mr. Abrams, the decision to partner with Cardinal was based on Cardinal’s ability to provide the level of strategic direction consistent with CIC’s aggressive growth plans. Trust was also a key component, “Seventeen years ago, my wife and I launched the business from a windowless office with a desk and a phone. Capabilities as well as compatibility in a new long-term relationship were important considerations for us in finding the right partner. Cardinal clearly stood out from their peers in these categories.”

“We are excited to partner with Brian to help take CIC to the next level of growth and continue to exploit the technology advantage the Company enjoys over its competitors.  With a highly fragmented and entrepreneur-dominated industry, we are confident that our platform can be successful in acquiring competitors and recruiting highly driven sales people.” according to Pete Munson, Managing Director of Cardinal Equity Partners.

Cardinal is pleased to partner with Star Financial and Aldine Capital to complete this transaction and appreciates the creativity and support displayed during the due diligence process.

Click here to view and download the press release.

Aqua Systems Acquires Alpha Water of Dayton, Ohio, January 2013

Indianapolis, IN  (January 17, 2013)  New Aqua LLC, D/B/A Aqua Systems, one of the largest independent providers of water purification and softening equipment in the U.S., announced that it has recently acquired Alpha Water Stores which has locations in Muncie and Richmond, Indiana.

Alpha Water was acquired December 31, 2012 and will be integrated into Aqua Systems existing operations in Indiana.  With the addition of Alpha’s stores, Aqua Systems will supply over 25 stores that operate under the Aqua brand name.  In addition, Aqua Systems is a supplier to hundreds of other quality independent water dealers across the U.S.

Aqua Systems, owned by the principals of Cardinal Equity Partners since 1997, is the largest independent provider of water conditioning equipment and bottled water in the eastern half of the United States.  With numerous company owned and licensed retail stores coupled with strong wholesale and commercial divisions, the company has a brand name that signifies quality equipment and superior customer service while delivering great value.

Click here to view and download the press release.

About Cardinal Equity Partners, LLC Cardinal Equity Partners is an Indianapolis based private equity firm that invests in profitable companies across a wide variety of industries.

2012

ESSCO Acquires Buckeye Vacuum cleaner Supply and Northwest Wholesale Distributors, December 2012

Twinsburg, OH (December 14, 2012) – The Electric Sweeper Service Company (“ESSCO”), a Twinsburg, OH-based distributor of floor care products has acquired Buckeye Vacuum Cleaner Supply and Northwest Wholesale Distributors, Inc. (collectively “Buckeye”).

Buckeye operates from two facilities in Atlanta, GA and Portland, OR, and distributes floor care products to independent retailers, specialty floor care internet retailers, and specialty distributors across the United States.  Buckeye was owned and operated by Kenard G. Strauss, who will assist ESSCO management with the integration of Buckeye operations.

“We were very excited to be able to reach an agreement to acquire Buckeye.  Their warehouse configuration and vendor line-up complements ESSCO’s business model extremely well and when integrated, will allow us to provide unsurpassed service levels in the industry,” according to John Ackerman, Managing Director of Cardinal Equity Partners.

ESSCO, recapitalized by Cardinal Equity Partners and LDI Ltd., LLC in March 2012, is the industry’s largest distributor of floor care products to independent retailers and specialty floor care internet retailers across the U.S.  The Buckeye acquisition builds upon CEP’s initial strategy to pursue add-on acquisitions to bolster its nationwide distribution network, broaden its product offering, and further expand upon its leading market share.  The acquisition further solidifies ESSCO’s position as the industry’s largest distributor.

Click here to view and download the press release.

About Cardinal Equity Partners Cardinal Equity Partners is a leading private investment firm located in Indianapolis, IN.  CEP has been investing in businesses in the lower end of the middle market since 1993 and is currently investing through its $50 million fund established in 2008.  The firm focuses on profitable businesses with revenue of $5 to $50 million and EBITDA of $1 to $5 million.  Industries of interest are business and healthcare services, niche-manufacturing, value-added distribution, and consumer products.  Investors in the fund are predominantly individuals that have had success throughout their careers and have the desire to assist with growth initiatives and oversight in portfolio businesses.  For more information about our firm and the rest of our holdings, please visit our website, www.cardinalep.com.

Cardinal Equity Partners Completes the Recapitalization of ESSCO, March 2012

Indianapolis, IN (March 28, 2012) – Cardinal Equity Partners, LLC (“CEP”), along with LDI LTD., LLC (“LDI”), is pleased to announce that it has completed the recapitalization of The Electric Sweeper Service Company (“ESSCO”), a leading distributor of floor care products.

Based in Twinsburg, Ohio and founded in 1924, ESSCO distributes floor care products to independent dealers and specialty floor care internet retailers across the U.S.  With four distribution facilities nationwide, ESSCO is the industry’s largest distributor, offering over 12,000 SKU’s.

MCM Capital Partners, LP, a Cleveland based private equity firm, was the majority selling shareholder and sought liquidity on its investment after acquiring ESSCO in 2005.

“ESSCO’s leadership position within the specialty vacuum channel coupled with its growing consumer fulfillment capabilities and relationships with some of our nation’s largest specialty retailers attracted Cardinal to this investment opportunity.  MCM Capital and the management team have done an extraordinary job of positioning ESSCO for future growth and we are very excited to step in to help keep the momentum going,” according to John Ackerman, Managing Director of Cardinal Equity Partners.

Moving forward, incumbent management will remain with ESSCO and will work alongside CEP and LDI to pursue a number of identified growth opportunities.  CEP, LDI, and senior management will also pursue add-on acquisitions to bolster its nationwide distribution network, broaden its product offering, and further expand upon its leading market share.

About Cardinal Equity Partners Cardinal Equity Partners is a leading private investment firm located in Indianapolis, IN.  CEP has been investing in businesses in the lower end of the middle market since 1993 and is currently investing through its $50 million fund established in 2008.  The firm focuses on profitable businesses with revenue of $5 to $50 million and EBITDA of $1 to $5 million.  Industries of interest are business and healthcare services, niche-manufacturing, value-added distribution, and consumer products.  Investors in the fund are predominantly individuals that have had success throughout their careers and have the desire to assist with growth initiatives and oversight in portfolio businesses.  ESSCO represents the seventh investment of CEP’s most recent fund.  For more information about our firm and the rest of our holdings, please visit our website, www.cardinalep.com.

Cardinal Equity Partners (“CEP”) Exits Fruminator, December 2012

Indianapolis, IN – Cardinal Equity Partners (CEP) successfully exited its investment in FURminator, selling the maker of pet care products to United Pet Group.  FURminator is the worldwide leading provider of branded deShedding products to the pet industry.  In addition, the Company’s shampoos and conditioners also help reduce shedding by promoting a healthy skin and coat.

Based in Cincinnati, Ohio, United Pet Group, Inc. is a subsidiary of Spectrum Brands Holdings, Inc., and is the leading manufacturer of consumer products for the pet supply markets globally.

CEP assisted with the September 2008 recapitalization of FURminator along with Hammond, Kennedy, Whitney & Co. an Indianapolis, IN based private equity firm.  The firms were attracted to the company by its market leading portfolio of patented pet care products.  Over the course of the investment, FURminator successfully defended its patents against a number of infringements, expanded the product line and brand positioning, and gained distribution allowing the company to further cement its position as the world leader in pet deshedding products.

2011

Angie's List Goes Public, November 2011

A legacy investment fund of Cardinal Equity Partners (CEP) partially exited its investment in Angie’s List after the company raised about $114 million through its November 2011 initial public offering.  CEP’s legacy fund continues to maintain significant ownership in the publicly listed company.   Angie’s List trades on the NASDAQ Stock Market under the symbol ANGI.

Angie’s List is an Indianapolis-based provider of consumer reviews on local contractors and doctors in more than 550 service categories.  More than one million paying households in the United States rely upon Angie’s List to help them make the best hiring decisions. Members get unlimited access to local ratings via Internet or phone, exclusive discounts, the Angie’s List Magazine and help from the Angie’s List complaint resolution service.

Guardian Pharmacy, LLC acquires Southern Pharmacy Services, March 2011

Guardian Pharmacy, LLC., an Atlanta-based institutional and specialty pharmacy announced that it has recently acquired Southern Pharmacy Services of North Carolina.

Southern Pharmacy Services operates locations in Pink Hill and Kernersville, N.C. and serves almost 300 skilled nursing and assisted-living facilities.  Southern’s management rolled-over a significant portion of their proceeds from the sale and remain owners of this pharmacy business. Guardian Pharmacy, LLC. is the nation’s third largest institutional pharmacy.  Founded in 2004, Guardian Pharmacy is capitalized by the company’s management team, Cardinal and Bindley Capital Partners. The management team has extensive experience and success in high-growth, multiple-location specialty pharmacies.

Cardinal Equity Partners acquires Contour Industries, January 2011

Indianapolis, IN (January 7, 2011) – Cardinal Equity Partners, LLC is pleased to announce that it has acquired all of the outstanding stock of Surgoinsville, TN based Contour Industries, Inc (“Contour”). Contour is a provider of fabricated and tempered glass and serves a wide variety of customers across the United States. The Company is well known in the industry for its outstanding quality and superior customer service.

Jim Smeltzer, Managing Director of Cardinal Equity Fund, said “We are thrilled to have the opportunity to invest in Contour. Keener Mallicote, the rest of his management team, and all the other employees of Contour have created an outstanding company and we are pleased to help position the Company for its next phase of growth. We look forward building on their past success and being a vibrant part of the greater Kingsport business community. Contour has a reputation for being an outstanding corporate citizen and an employer of choice, and we intend to continue that legacy in the community and for a growing employee base.

Click here to view and download the press release.

Cardinal Equity Partners completes the recapitalization of Williams Sound, January 2011

EDEN PRAIRIE, MN (January 14, 2011) – Williams Sound, LLC, a leading designer and manufacturer of wireless listening systems announced that it has completed a recapitalization of the company, with financing provided by Cardinal Equity Partners, a private equity firm based in Indianapolis, Indiana.

Paul Ingebrigtsen, President & CEO of Williams Sound said, “We are excited to partner with Cardinal Equity to achieve our shared vision of accelerating growth in our core business and to pursue new growth opportunities. We were attracted to Cardinal Equity partners because of their approach to long term growth strategies, and a close cultural and philosophical fit. Cardinal brings management and financial depth to the table, along with a proven track record of growth and stability.”

“The recapitalization facilitates the liquidity needs of former shareholders and will allow us to capitalize on significant growth opportunities the management team has identified,” said John Ackerman, Principal Partner of Cardinal Equity. “We were attracted to Williams Sound because of its proven success in the market, an excellent management team who remain with the business and retain significant ownership of the company, and the exciting growth prospects we see for the company.”

Williams Sound designs and manufactures wireless listening systems for group and personal hearing assistance, guided tours, and language interpretation, offering FM, Infrared, Digital, and Loop technologies. The company is based in Eden Prairie, MN and has a network of valued Distribution and Representative partners throughout out the world.

Click here to view and download the press release.

Aqua Systems completes two acquisitions, January 2011

INDIANAPOLIS, IN (February 21, 2011) – New Aqua LLC, D/B/A Aqua Systems, a large independent provider of water purification and softening equipment announced that it has recently completed two acquisitions.

The Water Store of Columbus, Ohio was acquired in December, 2010 and will be integrated into Aqua Systems existing operations in Ohio. The Water Store is a retailer of both water conditioning systems and bottled water for home and office consumption.

Mountain Valley Water of St. Louis was acquired in January, 2011 and will be integrated into Aqua Systems existing operations in western Illinois and Missouri. Mountain Valley Water provides premium water to retailers and employs a direct to home/office delivery system throughout the metropolitan St. Louis area.

Aqua Systems, owned by the principals of Cardinal Equity Partners since 1997, is the largest independent provider of water conditioning equipment and bottled water in the eastern half of the United States. With numerous company owned and licensed retail stores coupled with strong wholesale and commercial divisions, the company has a brand name that signifies quality equipment and superior customer service while delivering great value.

Click here to view and download the press release.

Our Portfolio

Click on the logos below to learn more about company details.

Current Investments

ESSCO
Aqua Systems
Contour Industries
Motion Tech Automation
Guardian Pharmacy
POLYWOOD

Past Investments

Angie's List
Furminator

BFG Supply Co.

 

Better Way -200x140px white
Advanced Physical Therapy
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Williams Sound
Corporate Imaging Concepts

Contact

280 East 96th St.
Suite 350
Indianapolis, IN 46240
(317) 663-0205 (Office)
(317) 663-0215 (Fax)

John F. Ackerman
Managing Director
jackerman@cardinalep.com

Peter Munson
Managing Director
pmunson@cardinalep.com

James L. Smeltzer
Managing Director
jsmeltzer@cardinalep.com

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