Our Approach

We at Compass Group are known as top-down, thesis-driven investors, meaning we analyze broad macroeconomic trends to identify attractive industries. Our in-depth market research and pinpoint analysis drives our investment strategy and decision-making. At Compass, we are pro-active thinkers, not re-active.

Industry Sectors

Compass Group operates in highly fragmented markets, drilling down to find niche industries with no clear leader or category disruption. Among the industries we find attractive are:

  • Industrial & Differentiated Manufacturers
  • Alternative Energy Products & Services
  • Value-add Distribution
  • Engineered Products & Materials
  • Manufacturing Automation
  • Functional Food Ingredients
  • Healthcare Services

We do not invest in retail, hi-tech, bio-tech, restaurants, financial services, real estate or consumer products businesses.

Are You a Good Fit for Compass Group?

We seek to partner with industry leaders in niche markets that have greater than $100 million-plus potential. Our focus is on lower middle-market companies that meet these parameters:

Financial Characteristics

  • Enterprise values of $10 million to $100 million
  • EBITDA between $2 million and $10 million
  • A path to EBITDA margins greater than 10%
  • Equity investment of $2-20 million

We consider companies of all sizes and situations for bolt-on acquisitions.

Business Characteristics

  • Defensible market position (e.g., unique business model, IP, technology, etc.)
  • Favorable growth prospects and stable competitive dynamics
  • Positive historical cash flows with room for improvement
  • Business-to-business and product-centric
  • Diversified customer base
  • North America-based

Types of Transactions

Growth Equity

We seek to finance opportunities that allow a business to capitalize on new markets, favorable competitive scenarios, geographic expansion or acquisitions.

Industry Focus

We target acquisitions where the expertise of the resident firm or its investors can make an impact on the industry.

Management Buyouts

Working in partnership with a company’s management team, we acquire the assets and operations of the business they manage or another business in the same industry.

Ownership Exit

Either through an ESOP or control transaction, we work with sellers seeking to exit their business.