What’s the firm’s origin story?
Prior to founding the firm, I spent 20+ years working for various private equity and investment banking firms on Wall Street investing in numerous platforms and add-ons as well as advisory/capital raising assignments. I had always been interested in starting my own firm and received encouragement from LPs, family offices, competitors, and just about everyone with whom I had discussed the idea of starting a firm. I founded ACP in early 2020 with a focus on three industries — TMT, light manufacturing, and business/marketing services.
What is your investment thesis or value proposition?
ACP looks for businesses in the $3mm-$20mm EBITDA range, and we target majority buyout deals in industries where we have investing experience and significant relationships. Our strategic value creation approach was developed over 25 years of transacting and investing experience and is personalized to meet the unique demands of lower middle-market companies. We work actively but not day-to-day with management to generate revenue and earnings growth, usually in parallel with organizational development and professionalization of the companies in matters ranging from high-level strategy, additional human capital resources, identifying and executing add-on acquisitions, and upgrading internal financial and IT systems. Our value creation strategy is designed to be applied in a way that is customized for every portfolio company. This will assist in creating a result that more precisely targets resources to help management realize its vision and generate investment returns for our stakeholders.
Any notable differentiators for the firm?
We invest where we have experience! Given our size, ACP wants to manage only a small, concentrated portfolio of companies. This allows us to spend more time building each company and setting them up for success. On that note, my last name is literally on the front door, and I can ensure all portfolio companies will deal with me directly. Our firm’s name is personal and not just an animated name!
What are you looking for, and where are you seeing opportunities?
We are looking at additional platforms that have potential to be niche market leaders. In 2023, we are also active on the add-on front (closed two and looking at additional opportunities) with existing portfolio companies we manage. In addition, our firm is working with an operating executive looking for media information services companies. We look to back strong management teams and do not tend to get as involved running the day-to-day operations of our companies; instead we operate in a truly board-level role to the company while remaining active on M&A and financing plans.
In terms of finding new deals, we have developed a broad outreach strategy that has allowed us to find new opportunities through a wide range of business brokers and bankers, third party providers (primarily lawyers and accountants), and our own personal relationships. It involves having numerous conversations that don’t always lead to a new deal immediately, but it is critical that we have connectivity with that deal source.
Finally, can you regale us with an interesting or funny M&A story?
We have many stories of behavior that is brazen, hiding losses, interesting add-backs, background checks, and litigation. There is never a dull moment in our business and it’s hard to point out a single event. I want to tell a story that focuses on positive relationship building.
I visited a company several years ago that I was contemplating making an investment. After arriving at the local airport, I hopped into a rental car to drive to the company. As I was getting close, I noticed many firetrucks and other first responders passing me. I entered the driveway to find the company’s HQ was on fire and all the employees, the owner, and the banker were outside while the first responders were tending the fire. I spoke to the owner and asked him if anyone was hurt, and he said “no!” I wished him well and proceeded to drive back to the hotel along with the investment banker. After having dinner and and a good night sleep, I boarded a flight back to NYC on the next day. Just to be helpful, I called the owner and introduced him to a few business interruption specialists. This man just had his business go up in flames and needed some help. Over time, he built his business back up but decided to not to sell. Because of the goodwill built, he has introduced me to other sellers, he wants to potentially invest his personal capital in ACP, and the banker has since consistently sent me deal flow. A nice gesture can go a long way in our business!
