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About Channelstone Partners
Channelstone Partners, LLC is a private equity partnership composed of entrepreneurs, executives and investors. Channelstone
makes control equity investments in small, privately-held companies ("microcap companies") that combine
solid business fundamentals with potential growth.
The firm provides superior returns to its investors by acquiring mircrocap companies and unlocking their
value through proactive management. Channelstone targets liquidity events within three to five years.
How Channelstone Invests in Microcap Companies
Channelstone invests in stable-growth operating companies that have an enterprise value below $20 million which meet a set of defined acquisition
criteria.
Transactions include privatizations, management buy-outs, the funding of growth capital, add-on acquisitions, and buyouts of passive or unproductive
shareholders. Channelstone conducts aggressive due diligence to evaluate each contemplated transaction.
Accelerating the Growth of Channelstone’s Portfolio Companies
Channelstone’s partners are actively involved in each investment, taking strategic roles in portfolio companies to execute growth strategies and cultivate
appropriate management. Channelstone works rapidly to build more valuable portfolio companies by redefining business models, introducing strategic
relationships, and creating new value from existing or underutilized assets.
The firm provides capital and financial and strategic expertise to give portfolio companies a competitive edge. Channelstone leverages its proprietary network of financial
and technical advisors to accelerate the growth of its portfolio companies.
Investor Exit Strategy
Channelstone’s goal is to realize a significant liquidity event within 3-5 years after acquisition
through the sale of the company to a strategic or financial buyer, through a leveraged recapitalization or through a
public offering.
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Channelstone's Acquisition Criteria
Channelstone identifies and acquires
microcap companies with demonstrated
potential for accelerated
growth. The firm’s criteria for investment
targets include:
- Enterprise value below $20 million.
- Located in the Continental U.S.
- Previous owner willing to assist in
transition.
- Strong management prospects.
- Clear, attainable growth strategy.
- Well positioned.
- Financial characteristics include:
strong cash flow, potential to
benefit from financial restructuring,
and sustainable margins.
- Situations of interest include:
controlling stake in growth opportunities
and roll-ups, family-owned
businesses, divestitures, and
companies with succession issues.
- Channelstone avoids investments
in construction contractors, real
estate, high tech, and distributors/
resellers.
Channelstone’s Investor Return Targets
- Planned exit within 3-5 years.
- IRR in excess of 30%.
Channelstone Information Documents
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