Investment Criteria

Washington Equity Partners makes control equity investments in lower middle market businesses in North America with unique and differentiated capabilities.  We are seeking to partner with like-minded management teams who have the vision and commitment to build industry-leading companies in our target sectors.

 

Industry Sectors

  • Aerospace, Defense, and Government Contracting
  • Industrial and Advanced Manufacturing
  • Software and Technology

Targeted Criteria for New Platforms

  • $3 - $15 million in EBITDA
  • Committed and proven management
  • Established, profitable and sustainable business model
  • Multiple opportunities for rapid organic and acquisition-driven growth

Targeted Criteria for Add-On Acquisitions

  • Strong strategic fit with a platform company
    - Direct and indirect competitors
    - Complementary products, services and capabilities
    - Strategic customer and channel relationships
  • No minimum EBITDA threshold

Capital Structure

  • Control equity (>50% equity ownership)
  • $5 - $50+ million of equity invested 
  • Patient, long-term oriented capital with flexible holding periods
  • Significant management rolled over or co-invested equity 
  • Substantial management equity incentive plans
  • Prudent leverage levels that facilitate management's execution of strategic plans

 

VALUE CREATION

HELPING GREAT COMPANIES REACH THE NEXT LEVEL.

Washington Equity is an active and constructive investor, dedicated to working collaboratively with management to help lower middle market companies reach the next level.  We invest in companies with scalable business models that can leverage our capital and resources to create significant long-term enterprise value.  Although each situation is unique, our value creation strategies are centered around six main themes:  

  • Revenue Growth Acceleration. Dedicate resources towards accelerated revenue growth strategies, including new customer or contract acquisitions, geographic and vertical expansion, new product and service offerings, pricing strategies, customer analytics, and sales force build-outs.
     
  • Strategic Acquisitions. Build an M&A capability to source, execute and integrate strategically significant acquisitions that can deliver transformative value.  During our careers, the Washington Equity team has collectively completed over 30 add-on investments, and we have the expertise, resources and experience to execute an acquisition-driven growth strategy.  
     
  • Capital Allocation. Refine and enhance strategic plans by bringing an enterprise value orientation towards capital allocation decisions.  We provide our portfolio companies with the perspective and tools to enable management to measure capital investment returns by the amount of sustainable equity value created.    
     
  • Operational Improvement. Identify opportunities for operational improvement, including supply chain optimization, lean initiatives, technology efficiency, and establishing new distribution channels.  We also work with management to implement or augment KPI monitoring and bolster financial systems and controls.
     
  • Talent and Human Capital. Introduce new relationships that can accelerate the achievement of strategic goals, including the recruitment of senior executives, board members, industry advisers, and specialist service providers.  In addition, we help management develop corporate governance best practices and design compensation programs that align employees with strategic goals.     
     
  • Capital Markets. Access debt markets to optimize capital structure and lower the cost of financing.  In addition, the Washington Equity team brings a proven track record of successfully managing sale processes to find the right strategic fit.