The Osceola Edge

The Osceola Edge

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  • Focus on Micro Private Equity®: acquiring smaller businesses at lower multiples with potential for growth
  • Experienced partners making individual buyout and opportunistic minority investments of up to $20 million in attractive, growth-oriented lower
  • Return target: 25-30% IRR
  • Characteristics sought:
    • Established value proposition
    • High barriers to entry
    • High cash flow orientation
    • Potential for scalable organic growth (market size/market share)
    • Potential for follow-on acquisitions
  • Industry focus:
    • Business services: emphasis on financial services, healthcare services
    • Light/niche manufacturing: emphasis on renewable technologies
    • Highly fragmented industries
  • Fund III is the continuation of a successful investment strategy that Osceola partners have deployed over the last decade
  • Access promotes sourcing: the Osceola ecosystem
    • Track record of successful acquisitions to build upon
    • Willingness to partner with others increases exposure to quality deals, including history with other PE groups as co-investors
    • Rare combination of managing partners who have been both investors and operators
      • Osceola’s founders are entrepreneurs who share deep operating experience in C-suite roles, resulting in wide-ranging relationships across a diverse industry spectrum
    • Close ties to major family office provides additional facet of deal sourcing
  • Broad exposure to network of businesses
    • Generating strong leads
    • Strengthening sourcing capabilities
    • Proactive creation of sale opportunities
    • This ecosystem naturally expands, organically growing as connections and network broaden, creating a natural arbitrage
  • Ability to effectively and efficiently execute closings
    • Facility with the nature of inefficient information
    • Understand the audience: navigating sellers’ emotions and the transfer of concentrated value
  • As former business operators, Osceola principals understand the complexities and challenges of managing, growing, and selling a small business
  • Relating on same level with small businesses
    • Successfully transitioning owner from pilot to co-pilot
    • Osceola at the table not across the table
  • Trust and common vision
    • Identifying with business owners allows greater understanding and capacity to navigate emotions
    • Fosters ability to close and move forward efficiently
  • Skill to identify and recognize intrinsic value
  • Identify key constraints and solve them
    • Micro Private Equity®: able to manage the risks into strengths
  • Hands-on approach/sharing approach
    • Control and minority positions
  • Accelerates growth of portfolio companies
  • Natural arbitrage

Versatility

Osceola’s versatility provides a tool kit for sellers that unlocks business growth opportunities, including succession plans, transition execution, optimal exit strategies or tailored solutions.

Flexibility

Osceola’s flexibility attracts businesses with the strongest fundamentals that are poised for dynamic growth.

Vision

Osceola’s vision transforms what other buyers would view as a bolt-on acquisition into its own platform business with proprietary strategy and brand value.

  • Creating businesses through organic growth and/or acquisitions that can be sold to an expanded universe of both strategic and financial buyers

Underserved Space

  • MPE is a fertile and underserved space to select and organically grow companies and sell at higher multiples, creating greatest value for investors
    • The MPE is a space most notably underserved by sophisticated capital

Inefficient but Active Space

  • More than 40% of PE activity in 2Q 2016 in deal sizes below $25M
    • There are 156,000 US firms with revenue between $10mm and $50mm and 21,000 firms with revenue between $50mm and $100mm (source: GE Capital 2011)
  • Oversupply of attractive candidate companies gives Osceola investors exposure to the top performers

High Barriers to Entry

  • MPE has high barriers to entry—inefficient information, resource-intensive, smaller dollars to work— Osceola overcomes them, turning the barriers into bridges

Osceola’s Edge in the MPE Space

  • Osceola mitigates risks often inherent in smaller investments, buying at lower multiples using less leverage, avoiding cycle-dependent businesses
  • isintermediation is more likely in the MPE, allowing for more direct negotiations and overall transparency
  • Osceola looks for a path to grow the bottom line of a business and put it in a better defensible position, aiming to triple or quadruple equity value within five years