For over 30 years, DFW Capital Partners has partnered with business owners and management teams to drive growth and build great middle-market companies.
DFW Capital Partners is a private equity investment firm focused exclusively on the lower middle market. Since 1994, our firm has been sponsoring growth investments, leading management buyouts, and supporting consolidation strategies for businesses with EBITDA typically under $20 million.
Our investments can take many forms, including leveraged/un-leveraged buyouts, corporate divestitures, liquidity-driven recapitalizations, or growth and acquisition capital funding. Our hallmark is one of integrity, fairness, and forward thinking. We are disciplined, flexible, and creative.
Our team has extensive equity investment, investment banking, operating, and industry expertise, and we work closely with our management teams to create value in our portfolio companies. Our Operating Partners are seasoned industry executives who bring deep experience and valuable insights to our investment strategy and our portfolio companies, where warranted.
We are diligent, honest, and patient investors. Combined, these traits have allowed us to establish and maintain close and long-term relationships with our limited partners, co-investors, lenders, deal sources, and portfolio company management teams.
DFW Capital Partners has extensive expertise in acquiring and growing companies in the Healthcare, Business, and Industrial Services industries. Over the years, DFW Capital Partners has demonstrated the ability to earn above-average investment returns via the management and enhancement of the resources required to grow.
Service-oriented companies that are of particular interest include businesses that possess:
- Competitive advantages through the proprietary use of technology
- Recurring revenue streams derived from integration into their customers’ daily business cadence
- High margin, scalable business models with strong unit-level economics
- Regulatory or compliance-driven business models with “sticky” customer relationships
- An ability to grow through selective add-on acquisitions to diversify service lines, expand geography, or deepen customer penetration.
DFW specializes in investing in companies that are taking the necessary steps to reduce costs and increase efficiency while keeping clinical results as the top priority. Our ideal investment candidates are those which aim to leverage the value shifts in the medical reimbursement chain and demographic trends or bring valuable operating solutions to players in the healthcare value-chain around complicated compliance or clinical issues. Our involvement in healthcare has spanned from select provider-based businesses, outsourcing companies serving payers, providers and product companies, and various compliance-driven business service providers with unique skills aimed at the healthcare industry. DFW has extensive experience investing throughout the pharmaceutical value chain.
DFW has a long history of investing in outsourced business services, including value-added back-office processing, transaction processing/adjudication/audit, administrative services companies, industry-specific software, and technology-enabled consulting. We like companies that focus on driving increased efficiency, reduced costs, and best-of-breed business and operating practices – typically in a regulated end-market environment where compliance is an essential component to a client’s day to day business operations. End markets in financial services, utilities, pharmaceutical, and government services are of particular interest to DFW.
DFW has significant experience in the industrial services sector, including companies that focus on regulated end-markets. Areas of interest include companies that outsource non-core operational functions, and technology-enabled service providers focused on regulatory compliance, efficient labor utilization, improved turnaround time, and process improvement. End markets have included environmental, utility, energy, facilities management, and municipal infrastructure services.
DFW Capital Partners focuses its investment activities on making control investments in lower middle-market companies – generally defined as businesses with annual revenues of up to $200 million and annual EBITDA of up to $20 million, though we are flexible investors and considerate of the specific characteristics of any given opportunity.
We believe this segment provides an outstanding source of investment opportunities. In this segment, we can bring significant value to our portfolio companies through improvements in financial management, business strategy, strategic acquisitions, and exit planning.
Properly executed, this investment approach can lead to above-average revenue and earnings growth, as well as expansion in enterprise value multiples upon exit.
Our approach is long term. We identify key strategic growth areas, assist in the recruiting of senior executives, development of sustainable and scalable organization structures, identify and support add-on acquisitions and their integration, and facilitate access to both private and public capital.
DFW’s investment strategy centers on three key elements:
Optimize Investment Structure
There are a variety of ways DFW can structure its investments. Sometimes it’s the recapitalization of entrepreneur-led or family-held businesses where the selling shareholders maintain a significant minority stake. Other instances involve the spin-off of under-managed or non-core divisions of larger private or public companies. DFW will also assist companies by making growth investments to support de-leveraging or an essential add-on acquisition program. As capital partners, we can help business owners navigate complex transitions, aligning incentives and equity opportunities with management to encourage growth. We are creative investors who tailor the structure of our investments to the situation.
Invest in Platform for Growth
We are not operators and do not micro-manage. Instead, we professionalize our portfolio companies by providing the necessary assets and resources to accelerate growth. We can help recruit professionals to fill key management and operating positions and foster professional management practices. Along with personnel, our team can help improve financial and operating reporting systems and budgeting tools. Through these adjustments, DFW aims to enhance the overall workflow while creating a consistent standard for strategic, tactical, and financial planning processes.
Develop and Support Business Expansion
Our aggressive approach to growing revenue and EBITDA often results in multiple expansion at the exit. We help establish professionalized and highly focused organic growth engines. We also help find, evaluate, finance, and execute strategic and accretive add-on acquisitions. Both elements of our accelerated approach to growing revenue and earnings often result in stronger valuations upon eventual exit. Historically, exits involve a sale or recapitalization to a larger financial investor, or sale to a select strategic acquirer.