Investement focus

The SIG Investment Process includes four phases: Evaluation of opportunities (investment criterion listed on this page), acquisition execution, partnering with management and long-term planning. Each acquisition is unique - but in our experience - the acquisition process generally lasts two to eight months after a company has been identified as a preferred candidate. Partnering with management and long-term planning timelines are very specific to the needs and dynamics of a given acquisition target. Generically speaking, we look to work with existing management to identify areas of growth and work to establish measurable metrics that will allow for evaluation over time. 

• SIG believes that the pre-existing management team should be given an opportunity to participate in company performance via equity participation / incentives
• SIG invests in companies with no pre-defined exit timeline or holding period and is comfortable with the concept of maintaining indefinite ownership
• SIG welcomes discussion with investors or target companies on any topic including management partnering, long-term planning & investment horizon

SIG is interested in purchasing pre-middle market companies. Each opportunity is unique, and the criteria listed below serve as a general outline of factors we consider when evaluating a company:

1. Historical Performance: Stable 3-5-year profitable financial performance; steady growth

2. EBITDA: Target of $500k-$3MM; at least 15% and consistent over time

3. Customers: Loyal / Consistent recurring revenue (sticky customers); Minimal margin concentration with any given customer (Ideal X<5%); Annual customer churn < 25%; Low % of the cust spend; Switching costs

4. Growth: Steady historical growth; Easily recognized opportunities

5. Industry: Niche with competitive advantage(s); Minimal cyclical nature; Service & Manufacturing - minimum EBITDA Margin of 20%; Wholesale & Distribution - minimum EBITDA Margin of 15%

6. Management Team: Strong team culture with interest in investing in themselves (ownership); possibly in need of additional management and/or BOD expertise to execute on future growth opportunities

7. Owner/Operator: Serious about liquidity event; no clear successor