South, US continues to be a hub for dynamic private equity firms offering specialized investment strategies across diverse sectors. From Dobbs Equity Partners in Memphis, TN focusing on family-owned businesses with a long-term perspective, to Milton Street Capital in Houston, TX specializing in industrial services, these firms exhibit strong sector expertise. Key industries include manufacturing, healthcare, technology, business services, and industrial distribution. With targeted EBITDA ranges from $1M to $200M, these firms provide unique opportunities for investment professionals seeking partners with deep regional and sector knowledge.
Dobbs Family History The Dobbs family has been in business since 1920 when James K. Dobbs, the father of John Hull Dobbs, Sr., entered the automobile business. This initial business was so successful it led to almost of 80 years of leadership in the auto industry as well as successful investments in many other industries. These investments among others include: (1) a chain of automobile dealerships; (2) Dobbs Houses, Inc., a New York Stock Exchange traded public company engaged in the restaurant and airline catering business; (3) Premier Distributing, an Anheuser-Busch distributorship operating in the state of New Mexico; and (4) Three Rivers Holdings, Inc., a Medicaid Health Plan holding company with operations in Pennsylvania, Ohio, Tennessee and South Carolina. Dobbs Equity Partners, LLC ("DEP") DEP is the Memphis-based investment vehicle for the John Hull Dobbs Jr. family. We seek to make long-term investments where we partner with owners to build outstanding middle-market companies. With over three generations of investing in private operating businesses, our team is highly experienced working with individuals, families, and management teams as they seek to grow their companies. We are not constrained by the necessity to continually raise outside capital or by fixed investment horizons like traditional private equity firms. Through its team of family members and professionals, DEP is now actively engaged in both active business and passive investment management activities. DEP seeks to acquire controlling interests in active businesses that will allow it to earn a return on equity of at least 20% over a business cycle and which meet the other criteria described below. Financial Criteria Note: DEP's target return-on-equity depends on its perception of the predictability of the earnings of the business. DEP seeks a 20% ROE (or perhaps slightly below) for a business which historically has had, and which the firm believes will continue to have, a highly predictable stream of earnings over a cycle. DEP seeks higher returns-on-equity for businesses whose earnings are less predictable because of known risks facing the business. In assessing DEP's return-on-equity over a cycle, the firm factors in any concrete growth opportunities and employs leverage appropriate to the business. Company & Industry Characteristics Because DEP places a high value on management and company culture, the firm is flexible regarding industries in which it will invest. Like most investors, DEP prefers businesses in industries which have good growth potential, which have high barriers to entry, which enjoy superior and consistent margins, which are non-cyclical and which have stable customer relationships and defensible market positions. However, DEP has repeatedly seen businesses operated very profitably by talented management teams in industries not meeting these criteria. Thus, while DEP does generally avoid certain industries (see below), it is generally willing to consider a wide variety of industries provided the right management partners will be involved. Primary Sectors of Interest Sectors In Which DEP Will Not Ordinarily Invest Geographic Considerations While geographic proximity to Memphis, Tennessee is desirable, DEP will consider investments anywhere in the United States and currently owns several franchise auto dealerships and operating companies across the country. Startups While DEP's principal focus is on acquiring existing businesses with a record of accomplishment, the firm will consider start-up businesses. DEP views management as especially critical in start-up businesses and generally looks for management teams who have a track record of success in the type of business being considered. Turnarounds/Distressed Companies DEP is willing to invest in turnarounds or distressed companies provided the company involved otherwise meets its investment criteria. Transaction Types DEP is especially interested in management buyout transactions where management is buying out an historic individual owner of a business or where a corporation has made the decision to divest a non-core operation. DEP has expertise relating to family succession matters which allows the firm to participate in a flexible manner in a recapitalization of a business undergoing a generational change in ownership Ownership Structure DEP ordinarily owns businesses through a pass-through entity (generally a limited liability company or a limited partnership) which allows current distribution of profits without double taxation. This allows both DEP and its management partners to enjoy the fruits of successful operation without waiting for some kind of financial exit. No Need for Exit Strategy DEP's usual investment goal is to own companies for the long-term with cash distributions of profits being made currently (to both the firm and the managers) once the business is properly capitalized and current growth needs are satisfied. While DEP is certainly willing to consider exit strategies such as an IPO or strategic sale, a quick profit is not the principal goal of the firm. DEP believes this long-term perspective gives it an advantage over many potential acquirers who often have 4-7 year time horizons for getting into and out of transactions. DEP typically implements equity redemption arrangements with its management partners to allow them to achieve liquidity at an appropriate time. Assets Available For Investment DEP has in excess of $200 million in liquid assets available for private business investing activities. Available capital, together with prudent leverage, allows us to consider companies with an enterprise value up to $200 million in many industries.
Founded in 2017, Surge is a Dallas-based private equity firm. Surge generally focuses on businesses in the business services, healthcare, online businesses, and specialty goods industries. Primary characteristics sought are companies with high recurring revenue and predictable cash flows with EBITDA of at least $3.5MM. Surge takes a majority equity position in its investments and prefers to target acquisitions where the seller will remain on board in an ongoing capacity with a minority interest.
Founded in 2002, Argonaut Private Equity is a Tulsa, Oklahoma based private equity firm with over $1.5 billion of capital deployed by the firm’s principals. The firm is currently investing out of Argonaut Private Equity Fund IV, a $400 million fund that deploys Argonaut’s strategy of making control-oriented buyout investments in companies in the industrial, manufacturing and energy services and products sectors. Argonaut looks to partner with management teams to improve operations, implement best practices and generate shareholder value. Argonaut has an over 15-year history of creating value through strategic acquisitions and operational improvements at industrial, manufacturing and energy services and products companies. Argonaut achieves this through a collaborative approach with management and a low-levered capital structure that provides portfolio companies with the necessary financial flexibility to grow in a disciplined manner.
Cairngorm Capital is a specialist private equity investment firm providing capital and management expertise to leading US and UK companies. We invest in private lower mid-market growth companies in manufacturing, distribution, healthcare, and services industries. We manage $500m of committed capital and typically invest in companies with $2m to $20m EBITDA and the potential for substantial future growth.
Hidden Harbor Capital Partners is a private equity firm with an operations soul and intense passion for building great companies. Hidden Harbor brings large-scale, private equity experience and resources to the lower middle market with a focus on value-oriented, operationally intense situations. Our principals are investor operators who have both extensive transaction and operating experience to truly understand your business. As one team, we partner and work hand-in-hand with our portfolio companies to drive business successes. We love corporate carve-outs (3 out of our 6 portfolio companies were corporate carve-outs), family owned and founder owned businesses. What we look for:
We are passionate about improving the value and performance of your business. We've started companies, managed operations, made acquisitions, sold businesses, and learned plenty of valuable lessons along the way. Whether you are looking for a partner to help you grow your business, or someone to step in so you can take a step back, give us a call. We invest in businesses to help them grow, and hold for the long-term. Since we don’t raise blind pooled funds, we can seek out co-investors that have capital, experience, and expertise in your industry. Plus, with no arbitrary timelines to exit our investments, we have the patience and understanding to create value for the long haul.
Clavis Capital Partners is a unique private equity firm focused on control investments in the manufacturing and industrial services sectors. Clavis was founded and is staffed entirely by experienced operating professionals who have previously held senior operating roles (CEO/President/GM/COO) for industrial companies and possess deep domain expertise and contacts across a broad range of industrial and industrial services business. We focus on investments in under-resourced, lower middle-market businesses with a minimum of $3m in EBITDA and a capability for substantial growth. Since 1994, our principals have completed over 20 transactions representing over $1 billion of equity deployed.
Inflight Capital is a veteran-owned middle market investment firm founded by former company operators based in Austin, Texas. As experienced operators with extensive M&A experience, we approach growth through the operating lens. Our experience drives a deep understanding of the dynamics that impact a company from the shop floor to the boardroom.
FM158 Holdings is a family office focused on investing in private companies including but not limited to business services, healthcare, manufacturing, industrials, utility services, and energy. We partner with successful owner-led businesses seeking a pathway for growth or exiting the business. We look to identify opportunities where we can add value to an established business by leveraging collective experience, industry relationships and strategic insights. Our current partnerships include other family offices, specialized financial institutions, and seasoned entrepreneurs with extensive experience owning, managing, and operating successful private companies across the lower middle market.
Sunny River Management, LLC is an operationally-focused private investment firm backed by patient, long-term, family capital. Our focus is to build leading, middle-market companies in desirable industries by acquiring, operating, and growing smaller businesses. We are operationally-focused investors who have spent years in operating roles. We keep a close eye on the operations of our businesses and are readily available to support our management teams. Our approach is to concentrate on a few sectors to invest in and then immerse ourselves in each sector, working closely with our operational leadership to build our platforms to a national-level and to introduce management tools to help our management teams. We take a long-term view while keeping the proper focus on what is right in front of us. Below is some more information regarding our platforms: Industrial Inspection & Analysis, Inc. (IIA) is a national, high growth inspection, testing, and analytical business serving a breadth of industrial sectors and geographies in the U.S. and Canada. IIA is based in Atlanta, GA. IIA (affiliated with Sunny River Management, LLC) seeks to invest in industrial testing and analysis businesses in most industries (General Industrial, Midstream, Downstream, Power/Utility, Aerospace/Defense, Medical, Precision Manufacturing, Aerial/Lifting Equipment, Product Certification, Construction, etc.). IIA is active in both field testing and laboratory testing. IIA has grown aggressively through acquisition and is very actively seeking acquisition targets - you will see a number of tombstones in our profile with the IIA logo. We have an interest in all types of industrial testing. Funding is in place for several moreacquisitions across a wide range of sizes. Our focused transaction size range is ($300k - $2mm EBITDA). We have completed larger acquisitions through IIA and have the capacity to complete larger acquisitions. New Platforms Sunny River Management is starting new platforms in other industries where we can apply our operating experience. New prospective platforms will have similarities to our current platforms.
Baymark Partners is a Dallas-based private equity firm investing in growing middle market IT, healthcare, business and distribution services, as well as lite manufacturing providing owners with liquidity and companies with resources to accelerate their growth. The professionals at Baymark Partners possess over 100 years of successful experience in acquiring, investing and operating growth companies. Their experience ranges from early stage, high growth to fully developed market leaders. This experience, combined with its active Advisory Board, gives Baymark the ability to implement strategic and operational discipline required to transition middle market companies to a more mature and valuable market position.
Founded in 2005, KLH Capital is a private equity firm serving management teams of lower middle-market companies in the specialty services, value-added distribution, and niche manufacturing industries. The firm makes majority and minority equity investments in U.S.-based businesses to support the company’s growth plans, provide ownership opportunities for key managers, and allow owners to harvest the value in their businesses. Our commitment goes beyond financial support as we believe in establishing a collaborative team of peers, all of whom have a hand in the company’s progress. When we combine management’s industry and operational expertise with our own, the company’s full potential is unlocked and value is created. Since its founding, KLH Capital has raised $935 million. For more on our investment approach, please visit our website: www.klhcapital.com.
Blue Sage Capital is an Austin, Texas-based private equity firm that has been investing in profitable, growing, lower middle-market companies since 2002. Blue Sage currently has over $400 million of assets under management and seeks to partner with founders, families, and management teams as the first round of institutional capital for businesses that enjoy leadership positions in niche manufacturing, environmental solutions, or specialty services industries. Blue Sage typically invests $20 million to $40 million in control buyout investments and recapitalizations of companies with $20 million to $200 million of revenue.
Founded in 2016 by David Fredston and an experienced group of private equity professionals, Sole Source Capital LLC (“SSC”) is an operationally-focused lower-middle market investment firm that targets investments in diversified industrial companies. SSC seeks to partner with founder-owned businesses and capitalize on opportunities with a higher degree of complexity, including corporate carve-outs and management buy-outs. SSC's expertise is in opportunities where our principals and operating advisors can help management teams achieve their goals by fostering a collaborative, high-touch relationship. The firm is headquartered in Santa Monica, California.
Milton Street seeks to consistently generate market-leading returns by transforming lower middle market industrial companies into sustainably great businesses through active engagement in strategy, human capital, and commercial and operational improvements. Prior to forming Milton Street in 2016, our founding team worked together for over a decade at a large and highly successful institutional private equity fund manager. One challenge that we believe the traditional private equity model faces is the pressure to invest in larger and larger companies, companies where there are fewer opportunities to structurally transform the business through applying best operating practices. In light of this, we are focused on the lower end of the middle market, where structured value creation programs can have a more meaningful impact. We have built a model in which we want to invest our own time and money and believe that it is ideally suited for owner-entrepreneurs and management teams seeking to grow and transform their companies. Our partners have backgrounds in law, finance, operations, and accounting. We believe that our diversity of experience, skill, and thinking is one of our greatest strengths and a resource for all of our portfolio companies.
Unity Partners is a middle-market PE firm that backs ambitious leaders in fragmented services businesses. Our Partner & Propel strategy - a) partners with leaders who would like to accelerate their plan through M&A b) propels teams forward by bringing operating expertise from the outset to help with levers, scale, and integration. We follow six operating principles, one of which is 'Purpose' - our belief in sharing the upside and building better together through broad employee ownership.
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