Investment Philosophy

Over our 40+ years advising, acquiring, operating, and growing lower middle market businesses, we’ve developed a set of core investment principles, which have served us (and our partners) well.

We focus on businesses with the following attributes:

PROFILE
    • Traditional manufacturing, distribution, transportation, and select service businesses
    • No high-tech, health sciences, highly regulated, retail, or “Main Street” businesses
    • Attractive growth prospects
    • Defensible market positions
    • Stable competitive dynamics
GEOGRAPHY
    • Platform Investments: Primarily Pennsylvania, Maryland, Delaware, and New Jersey.
SIZE
    • Revenues of $5 million to $50 million
    • EBITDA of $1 million to $3 million
      • (We will invest in companies with EBITDA above $3 million by utilizing co-investment arrangements with select private equity partners and family offices)
    • $2 million to $4 million of equity investment per platform
MANAGEMENT
    • Seasoned management team in place
    • Motivated to manage in a metrics-driven and continuous improvement environment
    • Ability to integrate add-on acquisitions
STRUCTURE
    • Complete buyouts
    • Majority buyouts
BUY-SIDE/FINDER'S FEES
    • We welcome introductions to great businesses from buy-side intermediaries and will pay referral fees for completed transactions

Our Philosophies

Long-Term Focus

We invest for long term appreciation in value, guiding our management teams accordingly (not encouraging sub-optimal decisions to hit monthly or quarterly numbers)

Aligning Key Management’s Interest with Owners

We want key managers thinking and acting like owners, and incentivize them through financial transparency, performance bonuses, LTIPs, and actual ownership

Investing in the Success of Employees

We recognize employees are a company’s most valuable asset, and invest in their success by promoting: coaching, training, professional development, and team-based activities

Metrics-Driven Management

We work with management teams to establish Key Performance Indicators (KPIs) from which they can more effectively manage and measure company performance

Systematic Capital Investment in the Business

We incorporate systematic capital investments directly into annual budgets and strategic plans to ensure the business has sufficient resources to stay on course

Conservative Capital Structures

We structure our transactions prudently, with a healthy infusion of equity and moderate debt levels in order to weather extended down business cycles or unforeseen circumstances

What You Can Expect

Pre-closing:

Trendline invests in private companies with the goal of partnering with owners/management teams to create value over time. When we are introduced to an opportunity, our objective is to learn as much as we can with as little disruption to management as possible, recognizing they have a business to run.

The process usually starts with a call or meeting where we seek to understand the owners and management team’s goals, and the company’s financial performance, value drivers, challenges, opportunities, and competitive positioning within its industry. 

Following our visit, assuming all parties remain excited about a potential partnership, we will request additional information and seek to submit a Letter of Intent as expeditiously as possible. 

If we are able to reach an agreement that meets all parties’ objectives, we would enter a period of exclusivity and begin due diligence.

Due diligence is a necessary evil; however, we will endeavor to be respectful of your management team’s time, transparent in our dealings, and efficient in our process with the goal of getting to a successful closing as quickly and least disruptive as possible.

Post-closing:

After the transaction has closed, we view our role as a resource to assist the company in achieving its long-term goals. 

We will not be active day-to-day, nor will we upset the team chemistry and culture of the organization. Having been operators under private equity ownership, we are keenly aware of the pitfalls of too much involvement. 

We will play to our strengths, which is helping management with strategic planning, banking relationships, establishing KPIs and performance incentives, providing growth capital, and in some cases acquiring synergistic businesses.

Check out our current investments