Investment Criteria

Focused on long-term value versus short-term profit and exit.

Flexibility is our hallmark.

As an operationally-focused private equity firm based in Florida, The Anderson Group has been in business for more than thirty years. We have successfully deployed our unique investment style across a wide variety of transactions in numerous industries. The Anderson Group leverages extensive operational experience when partnering with management to build long-term value.

Flexibility is the hallmark of The Anderson Group. Because we invest a pool of our own committed equity capital and are not an institutional fund, we are able to consider many transactions that other firms cannot or will not. We are often able to get comfortable with business risks that institutional funds avoid, such as customer concentration, diminishing industries, and a lack of visibility on exit sales.

Investment Criteria:

Revenues

From $10M to $100M for platform investments (no limitation for add-ons).

Voting Control

Voting control is required for all portfolio businesses. We are control equity investors.

Industry

Industry Agnostic. Although we tend to focus on manufacturing, distribution, food and industrial service companies. See below for industries we avoid.

Management

Do not need management in place, but interested in partnership with incumbent management if possible.

EBITDA

From $1M to $5M of normalized/proforma EBITDA for platform investments (no limitation for add-ons). No minimum in restructuring situations where we can effect improvements in profitability.

Market & Location

Headquartered in the United States for new platform investments, however many of our portfolio companies have significant international operations. Add-on investment opportunities headquartered outside of the United States will be entertained.

Transactions We Tend to Avoid

The Anderson Group does not invest in businesses without a significant operating history, such as start-up, venture capital, or “re-start” transactions. Generally, we do not invest in technology, biotech, natural resource, restaurant, or retail businesses. Given our investment strategy, we also tend to avoid companies with “hockey stick” financial performance (significant, recent profitability growth) leading up to a proposed sale.

Finally, The Anderson Group does not consider transactions whereby we do not have voting control or where, in the case of new platform investments, the business is headquartered outside of the United States.

The Anderson Group engages in a wide variety of investment situations wherever companies can leverage our extensive operating and transaction experience to effect profitability improvement. While we tend to be opportunistic, only investing in situations where we can add true value, our new platform investments generally fall into one of the following situations:

The Anderson Group invests in performing businesses only if they can use our operational and strategic resources to significantly expand their business. Current ownership or management must be interested in retaining a significant equity stake (in excess of 30%) in the business while partnering with The Anderson Group.

Though typically performing well, these businesses are in need of operational or strategic assistance in one form or another. We are uninterested in optimized businesses with recent profitability expansion or where current ownership or management is interested in exiting.

Generally, these investments take one of the following forms:

Recapitalizations

The Anderson Group can structure transactions that allow the owners of well-run businesses at the lower end of the middle market to gain liquidity and asset diversification for their personal portfolios while still retaining a significant equity stake (up to 49%) in their company.

Generational Sales

The Anderson Group can facilitate the existing generation of a family-owned business selling a portion of their company for liquidity or estate reasons while preserving family post-transaction continuity in the management and/or ownership of the business.

Cash Flow Transactions

The Anderson Group’s unique position as an investor of our own private capital enables us to invest in long-term partnerships that rely on a business’ cash flow rather than solely exit multiple to drive return. This is helpful when ownership does not want to enter the private equity cycle, whereby their business will have to be re-sold every 3–5 years, or where the company, either by its nature or its industry, does not have a definable exit sale strategy.

Because of our extensive operational experience and unique business model, The Anderson Group has been investing in turnaround situations at the lower end of the middle market. Whether the transaction is an out-of-court restructuring, a 363 sale, the sponsorship of a reorganization plan, or simply an investment in an underperforming company, The Anderson Group is committed to working with the business and its management team to restore profitability and create value for debt and equity holders, employees, customers, and other stakeholders.

With turnaround investments, in addition to those criteria listed elsewhere, The Anderson Group generally seeks the following:

A demonstrable explanation for corporate underperformance

Examples include failed acquisitions, poor business decisions, industry cyclicality, over-leveraged balance sheets, and/or excessive legacy costs.

A definable path to profitability

The turnaround does not need to be complete or even underway (we enjoy the restructuring process), we just need a vision for operational improvement.

Revenues in excess of $10M

Add-on investments need only be a compelling strategic fit with an existing portfolio investment and may not fit into any of the above categories.

The Anderson Group invests whenever able to leverage our unique business model, drawing from our own private capital, and we are committed to adding operational value to our portfolio companies by investing in certain situations that many other financial or strategic acquirers tend to avoid. Some of these include:

Corporate Orphans

Smaller divisions of larger companies that have suffered from a lack of attention and resources.

Companies with Customer Concentration

Companies with a concentration of one customer or a single, non-desirous customer type. So long as we believe a company is marketing a compelling product or maintaining a specific market niche, we are interested.

Out-of-Favor Industries

Companies in industries that investors avoid due to the timing of an economic cycle, headline risk, or unfavorable industry dynamics. So long as we believe that a company is marketing a compelling product or maintains a specific market niche, we are interested investors.

Companies with Unique Environmental, Union, or Other Issues

The Anderson Group is experienced investing in companies suffering from unfavorable union dynamics, environmental concerns or other unique issues. If we can quantify these problems and ascertain a methodology to mitigate their risk, we are open to investing.