We are a growth-oriented investor specializing in smaller middle market companies that are profitable, exhibit growth opportunities (both internal as well as through add-on acquisitions), and which occupy a defensible niche within their business segment. Many of the companies we invest in are family-owned or involve private owners looking to retire or transition to a more passive role. We always listen to a seller’s objectives in order to craft a solution tailored to meet the needs of all parties involved.

We consider several factors when determining the value of a prospective business, including the valuations of similar businesses, the overall size of the business and its historical and projected financial performance (specifically growth rates and operating margins). Additional factors that are taken into consideration include a company’s market share within its industry, the expected growth of the industry as a whole, the diversity and quality of the company’s customer base, the quality of the company’s management team and the capital intensity and working capital requirements of the business.

We always consider the needs of the seller when structuring our transactions. Selling business owners may receive proceeds in cash, stock, a note or in the form of a contingent payment based on the company’s future financial performance (referred to as an “earn-out”). Sellers often elect to “roll over” or reinvest a portion of their proceeds back into the company, allowing them to profit with us in the next transaction. We also cooperate with sellers to devise tax-efficient structures for our investments.

Each transaction is different, but it is typical for a deal to close within 60-90 days following the issuance of a letter of intent.  As a fiduciary, we have a responsibility to gain a thorough understanding of a prospective business before making an investment.  To accomplish this, we engage third party consultants to help us carry out customary legal, insurance, environmental, tax and accounting reviews. We also spend time with management to learn more about the company’s products and services, market position and customer relationships. We believe it is important to spend time with management learning the company’s story and developing a strong working relationship.  Once the preliminary terms of the deal are agreed upon, we will provide management with a list of requests needed to complete our confirmatory due diligence. The timing of the closing will depend, in part, on the company’s ability to provide answers and supporting documentation to fulfill our requests. We always endeavor to complete our due diligence as efficiently as possible in order to minimize the time required of the company’s management… we know it is not easy to run a company and deal with a transaction simultaneously!

Once a transaction is closed, we work closely with the management team at each company to develop a detailed business plan, or “Value Creation Blueprint” which serves as a roadmap for our investment and outlines our operating strategy. We hold monthly calls and quarterly board meetings with the management teams to discuss each company’s financial performance, evaluate potential strategic add-on acquisitions and discuss any general business initiatives and updates. Typically, the Executive Council members involved with the particular transaction will be involved in all of these interactions. Having said that, our approach has always been to serve as a non-intrusive, value-added partner to management, since they are the people that know the business best.  We encourage sellers to select the investor they believe will maximize value post-close, bring relevant expertise to the boardroom and make the best overall business partner. At Century Park, we place heavy emphasis on “fit” and believe finding the right cultural fit is just as important as a track record of strong financial performance.

Because we are a lean organization, we can ensure that the team you interact with during the initial transaction will be the same team you work with post-close.  Each deal will involve a Century Park Managing Partner to the lead the transaction, along with supporting 3 deal team members. You will also work closely with our operating team and Executive Council members.

We believe in entering transactions as true partners with management.  Sellers often decide to retain some of their ownership and remain on the board of directors or assume a more passive managerial or consulting type role post-close. We have also worked with sellers who are looking to completely transition out of the business.   In all cases, we use a collaborative approach with management, always adhering to our key tenets of integrity, transparency, alignment and respect.  Because we believe in entering into transactions as true partners with management, we allow key team members to participate in a management equity-based incentive program and encourage the senior members of the management team to invest alongside us in transactions. We would encourage you to talk to the managers of past and current portfolio companies to learn what kind of partner we have been.

We typically target a 3-5 year hold period for our investments. However, this may vary between companies depending on the amount of time it takes to maximize value and accomplish key objectives set forth in our “Value Creation Blueprint”.   We have held investments for close to ten years, too … it is always situation specific.