Investment Criteria
Through Franklin Street Equity Fund L.P., FSEP typically seeks to invest $5 million to $25 million of equity in companies with enterprise values ranging from $20 million to $100 million. FSEP is especially interested in acquiring middle market manufacturing and value-added distribution companies with the following qualities:
- An outstanding management team with a proven track record
- Annual sales or revenues in excess of $20 million
- Historical growth in earnings and cash flow
- Defensible business niche with significant barriers to entry such as product lines with strong name recognition, leading market position, proprietary technology or efficient manufacturing and distribution capabilities
- However, FSEP’s principals will consider investments in distressed situations where the principals have had prior working knowledge in industry segment where the target company does business
FSEP does not invest in companies that:
- Are subject to significant government regulations
- Operate in highly cyclical and capital intensive industries
- Depend on sales to a concentrated customer base
- Depend on materials from a concentrated supplier base
- Are subject to a high level of technological risk