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Investment Criteria – Direct Lending

Equity Capital for Lower Middle Market Businesses

Source Capital is a private equity firm that invests in mature, lower middle market companies across a range of industries. Since its founding in 2002, Source Capital has made more than 60 equity platform and add-on acquisitions.

Investment Structure

Preferred or common equity


Investment Type

  • Management-backed leveraged buyouts

  • Recapitalizations

  • Buy and build platforms

  • Growth capital

  • Corporate divestitures

  • Add-on acquisitions


Financial Profile

  • Revenue: Greater than $10 million

  • EBITDA: Greater than $2 million


Industry Experience

  • Business/Industrial Services

  • Niche Manufacturing

  • Healthcare Services

  • Value-added Distributionn

  • Consumer Products and Services

Target Profile

  • Asset light, niche businesses with strong competitive positions in small and/or fragmented industries

  • Strong regional businesses

  • Tech-enabled services and opportunities to develop new products and services

  • Opportunity for market consolidation through add-on acquisitions

  • Companies with recurring revenues, attractive cash flow characteristics and meaningful growth opportunities


Geography

Entire United States and selectively in Canada

Direct Lending for Lower Middle Market Businesses

Source Capital is focused on providing flexible capital to both sponsor and non-sponsor companies in the lower middle-market. The firm has completed more than 25 debt investments to date, and the team has over 100 years of collective experience sourcing, structuring, and managing such investments.

Investment Structure

  • Senior, unitranche and 2nd-lien debt

  • Equity co-investments

  • Investment size of $3 - $15 million


Investment Type

  • Management-backed leveraged buyouts

  • Recapitalizations

  • Independent sponsor transactions

  • Growth capital

  • Add-on acquisitions

  • Buy and build platforms

  • Refinancings


Financial Profile

  • Revenue: Greater than $10 million

  • EBITDA: Greater than $2 million

Industry Experience

  • Business/Industrial Services

  • Niche Manufacturing

  • Healthcare Services

  • Value-added Distribution

  • Consumer Products and Services

  • Technology Services

  • Transportation and Logistics

  • B2B E-commerce


Geography

Entire United States and selectively in Canada


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