Types of Businesses
Private or public companies, or spin-offs from larger companies.
• Growth Scenarios – situations where companies have the opportunity for organic growth through market development, incremental marketing, or increases in working capital.
• Leveraged Buy-outs – scenarios where the core business has predictable and sustainable cash flow that can be leveraged.
• Industry Consolidations - opportunities in fragmented industries, or new emerging markets, in which top-line growth and is driven, and operating expenses are leveraged, in large part via strategic acquisitions.
• Undervalued Public Companies – those companies that trade at a discount to their peer group due to equity control issues, lack of coverage by financial institutions, near-term cash needs, or concerns over management credibility among investors.
• Divisional Spin-outs – operating units of larger companies that have attractive underlying economics but have been neglected by the parent in term of focus, resources, or funding.
• Special Situations – companies that have either fundamentally sound operating economics or underutilized core assets and are poorly capitalized, require a new strategic direction or need new management.
New River prefers to supplement existing management teams with our senior executives.
Desired industries include business services or consumer services and typically have both a highly recurring revenue stream and diversified customer base. There must be the opportunity to create significant competitive advantage via scale and/or branding.
At a minimum, companies should be able to generate in excess of $10 million in operating profit within 3 years. New River has significant discretion with transaction size and can include co-investors. The amount of equity invested in each company is dependent on the economics of each deal.
Partner companies should be headquartered in the Southeast.
Companies should be self-sustaining, have operating margins in excess of 10%, or be able to achieve such threshold within two years.
Companies should have the potential to be the #1 or #2 player in their market.
Board Representation / Control
New River seeks control, directly or in conjunction with affiliated investors.