Principal Investing

Principal Investing

The founders of BrightWater Partners have spent the majority of their careers advising and financing companies that manufacture products or provide services to customers in the industrial, aerospace/defense, infrastructure/public works and medical device end markets. We seek to make investments in these same end markets in mature, stable, cash flow generating businesses that offer a defensible market position with strong revenue and earnings growth potential.

Investment Selection Criteria

Target investment size of $3-15 million per transaction

Target investments will be in stable and well established companies with the following characteristics:

  • EBITDA between $1.5-8.0 million
  • Stable operating performance
  • Strong and consistent cash flow generation
  • Strong and complete management team with a demonstrated track record of success
  • Management is seeking assistance in taking the business to the next level of size and sophistication

Investment Philosophy

Partners with Management

  • Acquire companies with its existing management and provide an opportunity for management to participate in the equity investment
  • Management equity ownership is the cornerstone of our investment philosophy. We offer significant equity and compensation incentives to management, thus providing key executives with the opportunity to build wealth commensurate with their contribution to the success of the business

Flexibility

  • Provide all layers of the capital structure for each portfolio investment. This flexibility provides BrightWater Partners with the ability to design a capital structure that provides execution certainty for selling shareholders and flexibility for long-term company growth

Focus

  • Actively pursue a small number of acquisitions each year. Once committed to a transaction, we use all of our resources to ensure a thorough, prompt and efficient due diligence investigation and a successful closing
  • Our investment committee consists of BrightWater Partners’ founding principals, allowing us to quickly react to any investment opportunity

Future

  • While we do not participate in the day-to-day operation of our portfolio companies, BrightWater Partners assists management with its strategic growth plan and provides the capital for the company to achieve its growth objectives
  • Through our strategic partnerships, we can provide valuable resources to management teams that can significantly enhance growth

Flexible Capital Approach

In support of its principal investing transactions, BrightWater Partners has the unique ability to provide all layers of the capital structure.

Senior Debt Mezzanine Debt Equity

Tenor

3 – 5 years 5 – 7 years No maturity

Security

Secured by

company assets

Subordinated to

senior debt

Subordinated to

senior & mezzanine

Investor Payout Frequency

Quarterly

Cash coupon pays

quarterly

Potential dividend payments, capital

appreciation

Expected Return

7 – 9% return 17- 20% total return 25%+ return

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