DEAL CRITERIA

Lower middle market deals come in all shapes and sizes. For most transactions we encounter, there is potential to transact given the right valuation and structure.

We work with sponsors and business owner clients to understand the blemishes, craft the story, and find the right capital provider(s) to get their deal done.

The following provides some details for the types of capital advisory or sell-side engagements we seek.

Exceptions can be made to these deal parameters, of course. We're always happy to connect and discuss.

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DEAL CHARACTERISTICS

  • STRATEGIC

    Defensible business model

    Historical track record

    US-based

    Experienced, motivated management team

  • FINANCIAL

    $10+ MM enterprise value

    $1.5+ MM EBITDA

    30% + gross margins

    Attractive cash flow profile

  • STRUCTURE

    Compelling investment thesis

    Passionate, dedicated sponsor

    Valuation and leverage that reflects the risk profile

OCP is NOT afraid of cyclicality, customer concentration, or key person risk. Those risks just need to be well-mitigated with valuation, capital structure and a post-closing plan.

INDUSTRIES OF INTEREST

Our favorites are boring, profitable businesses that are easy to understand and have a reason to exist. These are the businesses that define the lower middle market. Some examples of those include:

INDUSTRIALS

Niche manufacturing

Aerospace and defense

Automotive

Plastics and packaging

Building products

Water and/or infrastructure

e-commerce box going down conveyor

DISTRIBUTION

E-commerce

Value-add distribution

Warehouse and fulfillment

Transportation and logistics

SERVICES

B2B or Consumer

Business Process Outsourcing

Professional or IT services

Software as a Service (SaaS)

Facility Services

CONSUMER, FOOD AND AG

Branded consumer products or services

Retail, e-commerce or omni-channel

Contract manufacturing, processing and distribution

Durables or staples

NOT FOR US

It's not you, it's me.

Better put, our capital provider network doesn't pursue deals with these attributes, so neither do we:

  • Real estate
  • Financial institutions
  • Oil & gas exploration
  • Start-ups
  • International