Investment Criteria

Lorraine Capital is a private investment firm focused on acquiring controlling positions in businesses with a Western New York presence and, through an investment of both capital and personnel, helping those businesses grow and prosper.

Geographic Limitation

Western New York – i.e., Buffalo to Mohawk Valley.

Financial Criteria

Revenue Range:
Between $2.5MM to $100MM

Gross Margin:
At least 20%

Earnings:
EBITDA margins of at least 5%; preferable that last reportable year be greater than $100,000

Cash Flow History:
At least three years of historical, positive cash flow measured from current date

Industry:
Annualized projected growth over the next five years at least 2.5%

Non-Financial Criteria

Acquisition:
Acquire, at a minimum, controlling ownership interest – complete acquisition strongly preferred

Operational Ability:
Upon acquisition, Lorraine intends to help operate the acquired company

Middle Management Strength:
The company possesses strong operations and sales-based middle management

Seller Involvement:
Seller willing to stay on for a period of time to be negotiated following acquisition

Strategic Advantage:
The company maintains strong market position in industry and industry offers barriers to entry. Preferably, the company maintains a high degree of customer retention without significant customer concentration

Capital Expenditures:
The company has a track record of avoiding capital expenditures

Add-Ons:
Opportunities for strategic add-on acquisitions exist, yet the company has not pursued such acquisitions

Exit:
No specific timeline for exit required. Preferred that industry is fragmented and possesses history of acquisitions by strategic buyers

Examples of Preferred & Non-Preferred Industries1

Preferred Industries:
(i) Health Care
(ii) Food-Based – i.e., service, distribution, logistics, etc.
(iii) Niche Manufacturing
(iv) Distribution
(v) Energy

Non-Preferred:
(i) Traditional commercial printing
(ii) Seasonal industries
(iii) Retail
(iv) IT services

[1] This list contains examples of preferences – it is neither an exhaustive, nor all-inclusive list. Companies in other industries will be happily considered.

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