A Differentiated Approach to Private Equity
Acacia seeks to invest family-owned businesses to provide entrepreneurs and owners with liquidity and growth capital.
Our goal is three-fold:
1.
Provide liquidity to owners.
2.
Create long-term value for investors, management and employees.
3.
Preserve a company’s most important asset – its culture.
Acacia’s Differentiated Approach
| TRADITIONAL PRIVATE EQUITY | ACACIA APPROACH | |
|---|---|---|
| STRATEGY | Complete 2-5 transactions per year. Deploy capital quickly and build a diverse portfolio. | Partner with 1 new business per year and concentrate on being a best-in-class partner. |
| DEBT | Maximize leverage (including the use of senior and junior lenders) with tight covenants. | Use only a modest amount of senior bank debt with comfortable covenants. |
| TIME HORIZON | Targeted three-year exit to fit within the private equity firm’s business model. Due to the short time horizon, there is an unwillingness to re-invest in the company in the outer years with the goal of maximizing EBITDA. | Flexible, we have no predetermined timeline for liquidity and sell when the time is right for all stakeholders. This allows us to always invest back in the business no matter the timing of when good opportunities are presented. |
| NEGOTIATION PROCESS | Everything is on the table for a “Re-Trade” once the LOI is signed. Start with a high valuation and work your way down once you have exclusivity. | We close 100% of the time on exactly the terms agreed to in the LOI. We do not believe in negotiating with our future partners. |
| INTERACTION WITH MANAGEMENT POST-TRANSACTION | Parachute in for board meetings and often not “up to speed” because focused on closing new deals and overseeing a large portfolio. Only one point of contact within the firm that may have limited authority to make timely decisions. | Same partners you meet during the acquisition process are working with you post close. We will know the team and business extremely well and will be ready at all times to discuss key business decisions from an informed point of view. |
| INVESTOR NETWORK | Investors are pensions, endowments and insurance companies focused on the overall return of the fund’s portfolio without regard for any one company within the portfolio. | Family offices that created wealth in a variety of industries and have deep networks that they are excited to leverage for the success of our companies. |
| PARTNERSHIP MENTALITY | A “you work for us” mindset. | A “we work for you” mindset. |
| REFERENCES | Cherry-picked references. | Call any and every management team that we have partnered with. |
We believe our approach offers several other desirable attributes for business owners:
- Our desire is to maintain a family/entrepreneurial atmosphere. Unlike many private equity firms, we focus on growth and operational excellence rather than financial engineering and cost-cutting. Due to our permanent capital base and conservative capital structure, we can ensure that the culture and core tenets in place at the time of our investment remain intact.
- Our collaborative approach to partnership allows for a more comfortable dynamic throughout the due diligence process, negotiations and post-close. We view current ownership and management teams as our partners and we strive to make all decisions collaboratively. We understand that the current dynamics are working and we don’t impose changes that are not desired by our partners. We only seek to bring new ideas and to add value where appropriate, but never at the expense of the existing culture.