Investment Philosophy and Criteria
TAC Cap is a value investor who looks to build great companies through a buy-and-build strategy, focused first on fortifying existing platform businesses from the ground up before building on them through organic and/or inorganic growth. The buy-part of our strategy is our effort to acquire founder-owned businesses with transformative potential in niche segments of growing industries. The build-part of our strategy is our desire to partner closely and cooperatively with management teams with track records of success to build great businesses through value innovation, focused strategic sequencing, and enhanced operational execution.
Investment Criteria for Target Platform Companies
- Company Size:
- Revenue of $5 million to $50 million
- Cash flow of $1 million to $10 million
- Geographic Limiter:
- Southeast, USA
- Agnostic, but we prefer businesses in niche segments of growing industries, whether in light manufacturing, distribution, or service industries.
- Company Maturity:
- Founder-owned businesses in existence since at least 2006.
- Seasoned, disciplined, loyal management teams that are open to business transformation through both radical improvement and continuous, incremental improvement.
- Financial Characteristics:
- Stable cash flow
- Diversified customer base
- High recurring revenue
- High gross profit margin and net income margin
- Low fixed costs
- Low CapEx requirements
- Low working capital requirements