Equicapita Deal Process Summarised for Advisors


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Equicapita is a Calgary-based nano-gap private equity fund focusing on acquiring Canadian SMEs that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita generally seeks to acquire businesses: at what it believes are reasonable prices; with a demonstrated history of free cash flow greater than $1 million per annum; with a durable competitive advantage; that operate in industries that Equicapita believes have sound long-term macro prospects; with ongoing participation of senior personnel; with the ability to maintain the cash flow without disproportionate amounts of new capital; where Equicapita can partner with management and align their interest with Equicapita through tools such as earn-outs, vendor take backs and management incentive plans; to be held for the long term; where there is some potential to grow sustainable free cash flow, but where that growth is not essential to generate suitable returns.

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Equicapita Deal Process Summarised for Advisors

  1. 1. OVERVIEW Equicapita Income Trust (“Equicapita”) is a Calgary based investment fund; established for the purpose of acquiring private, small and medium sized enterprises (“SMEs”) in western Canada. As Alberta based entrepreneurs ourselves, we recognize the need for organized capital to partner with business owners to provide a much needed liquidity option to transition business ownership. We believe Equicapita is the solution. Our aim is continue the legacy of the business, by partnering with strong, existing management teams over a long term investment horizon. INTERMEDIARIES Equicapita understands and appreciates the important role that business intermediaries play in the private company marketplace. We believe that you will find several compelling reasons to partner with Equicapita in order to meet the unique objectives of your clients. Finders Fees – We are always seeking to expand our relationships with business intermediaries or industry experts. As a way to compensate you for your efforts we offer attractive buy-side finders fees. Western Canadian Based Fund – Equicapita is an Alberta based fund, with a highly experienced management team that are local entrepreneurs, with 45 plus years of investment experience. With a deep understanding of the SME landscape, our team has extensive mergers and acquisitions experience along with a strong track record for building, advising and growing small to mid-sized businesses. Accelerated Closing Process And Timely Transactions – Our access to capital enables the quick and professional consummation of transactions. We will act quickly to reduce the stress on the employees of the organization that is being sold. Our own experience allows us to quickly evaluate new investment opportunities. Flexible Solutions For Owners – Equicapita has the ability to tailor the financing of the transaction to accommodate a seller’s lifestyle and tax planning needs. We are open to the possibility of ongoing owner involvement. We understand the sensitivity surrounding employees, customers and the greater community and will conduct a quick and confidential diligence process that minimally affects the business. An honest and transparent partnership is the cornerstone of our business dealings. INVESTMENT FOCUS Financial Criteria  Long term operating history with sustainable cash flow  EBITDA of $1 to $5 million  Operating margins > 10%, in stable or growing industry  Low to modest capital intensity  Strong customer relationships  Incumbent management will accept performance-linked compensation Situational Criteria:  Owner ready to retire seeking liquidity  Owner who wants a reduced or more focused role (eg. business development, sales, etc)  Divestiture from a larger corporation  Company in need of management bench strength Company Criteria:  Western Canadian based business (preferred)  Diverse customer base, with low accounts receivable concentration  Well positioned in growing or fragmented industry  Strong corporate culture, with history of employee retention CONTACT INFO Stephen Johnston Managing Director sjohnston@equicapita.com Greg Tooth Managing Director gtooth@equicapita.com #803, 5920 Macleod Trail SW Calgary, Alberta T2H 0K2 www.equicapita.com Michael Cook Managing Director mcook@equicapita.com