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.
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:
Niche Manufacturing & Distribution
- Engineered Materials / Chemicals
- Functional Food Ingredients
- Industrial Automation / Motion Control
- Diagnostic Kitting & Packaging
Business & Consumer Services
- Testing, Inspection, Certification & Compliance
- Screening, Credentialing & Identity Solutions
- Specialty Physician Practice Management
- Pet Products & Services
We do not invest in retail, hi-tech, biotech, 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:
- Enterprise values of $10 million to $100 million
- EBITDA between $2 million and $12 million
- A path to EBITDA margins greater than 10%
- Equity investments of up to $50 million
We consider companies of all sizes and situations for bolt-on acquisitions.
- 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
- Based in North America
Types of Transactions
We seek to finance opportunities that allow a business to capitalize on new markets, favorable competitive scenarios, geographic expansion, or acquisitions.
We target acquisitions where the expertise of the resident firm or its investors can make an impact on the industry.
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.
Either through an ESOP or control transaction, we work with sellers seeking to exit their business.