Cardinal Equity Partners seeks to invest $2 million to $7 million of equity capital in situations that fit 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 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 revenue growth in excess of 10% per annum.
- 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.
