DarkHorse Partners (DHP) is an independent private equity firm led by former operating executives and consultants who seek to acquire manufacturing and distribution businesses to implement strategic and operational improvements in order to rapidly increase profits and position the businesses for successful exits. DHP targets stable businesses generating over $3 million in EBITDA and implements strategies combining McKinsey's strategic thinking with Toyota's principles of flawless execution and respect for people to capture opportunities, deliver faster results, and create highly valuable investment opportunities. DHP has achieved exceptional results through initiatives like streamlining processes, developing new products, and transitioning companies to positive cash flow within two years of acquisition.

1. Introductory Overview
LinkedIn Document
February 2015

2. www.DarkHorsePartners.net
SUMMARY
DarkHorse Partners (DHP) is an independent private equity sponsor in the lower middle
market which…
 Is led by former operating executives who are adept at rapidly delivering capital efficient
profit while building intrinsic organizational capabilities
• Philosophy is grounded in McKinsey & Company’s strategic thinking combined with
Toyota’s humble yet powerful principles for “flawless execution” and “respect for people”
 Seeks to acquire and operate manufacturing or “value added” distribution businesses
which meet our minimum criteria and possesses one or more key characteristics
• Targeting stable and established businesses with strong management teams generating
a minimum EBITDA of $3.0 M
 Offers business owners and investors a proven value creation strategy that uniquely differs
from typical private equity firms
• We see how to capture opportunities others do not
• We deliver faster results with greater confidence
• We create highly sought after investment opportunities
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3. www.DarkHorsePartners.net
OUR BACKGROUND
Lean practitioners
• Worked in Toyota and Nissan’s supplier development to
improve Quality, Delivery, & Cost of Tier 1 supply base
DHP is led by former operating executives who are adept at quickly delivering capital
efficient profit while building intrinsic organizational capabilities
Leverage operations to create
competitive advantages in terms
of quality, delivery, & cost
Identify opportunities & “size the
prize” quickly (days vs. weeks)
Develop & execute successful
value creation strategies that
return 6-8 times fees
Proven value creation while
positioning middle market
businesses for sale
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Management consultants
• Helped form the manufacturing practice at McKinsey &
Company (top 3 strategy firm) and served Fortune 500 clients
on strategy/operations
• Consulted with a myriad of private equity groups to enhance
“top” and “bottom” line performance (e.g., Arcapita, WHI
Capital, Sentinel Capital Partners, etc…)
Operating executives
• Held senior level positions while leading privately held
companies through large scale transformations

4. www.DarkHorsePartners.net
OUR LEADERSHIP TEAM
Our experience covers the full spectrum of acquiring, managing, and successfully
exiting closely held businesses
Stephen Chun
Managing Director
Michael Ferrell
Managing Director
Rick Lequieu.
Managing Director
Michael Schopin
Senior Adviser
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 25 years of business building expertise which includes considerable experience as
an operating executive & consultant for a number of private equity firms (e.g., WHI
Capital, Arcapita, Riverside Partners, Brightwater Partners, Catalina Capital, etc.)
 17 years experience strategically enhancing the performance, capabilities, and
culture of both family owned and private equity (e.g., Vestar Capital, and Norwest
Equity) controlled businesses to attain higher shareholder value. Served as a
mergers and acquisitions adviser over the last 7 years to lower middle market
business owners.
 20 years experience leading strategic and operations transformations to create
value while working as an Operating Executive and consultant in the public sector
and for numerous private equity firms (e.g., Sentinel Capital Partners, The Harbour
Group, Brightwater Partners, and Norwest Equity).
 15 years as a principal investor while also serving as an active participant in the
development and growth of the portfolio companies operating as everything from an
active Chairman of the Board to working as a C-level executive at the businesses.
Completed over 40 private control equity, minority equity, and direct debt investment
transactions during his career across a variety of industries. Prior to this, worked at
both hedge funds and mutual funds investing into public securities through both
traditional stock purchases and privately structured direct investments.

5. www.DarkHorsePartners.net
OUR VALUE PROPOSITION
Combining McKinsey & Company’s strategic thinking with Toyota’s humble yet
powerful principles for “flawless execution” and “respect for people” yields a
refreshing and distinctive approach to partnering with private equity firms
 Respectful partners with a “let’s roll up our sleeves” collaborative style
 Flexible deal structures which wisely uses a combination of debt and equity to achieve
the optimal capital structure and minimize the after tax cost of capital
 Healthy value creation through executable business strategies and effective change
management, e.g.,
• Sales growth (e.g., expanded distribution, incremental sales through improved service,
etc…)
• Margin enhancement (e.g., pricing strategy, procurement, waste elimination, supply
chain optimization, etc…)
• Efficient use of capital (e.g., order to cash leadtime, inventory optimization, etc…)
 Extraordinary professional contacts providing unique access to key decision makers
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6. www.DarkHorsePartners.net
ACQUISITION CRITERIA
DHP seeks to acquire/operate manufacturing or “value added” distribution businesses
which meet our minimum criteria and possesses one or more key characteristics
 Basic acquisition criteria:
• $3 M EBITDA
• Minimum 5 years in business (no early stage businesses)
• Stable/growing sales and profits
• Strong management team in place
• Significant value creation opportunities can be realized within the first 12 months
(33% of EBITDA minimum)
 Preferred characteristics:
• Significant market “head room” (>50%)
• Defendable competitive advantage
• Repeat sales to a diversified customer base
• Fragmented industry
• Independence from owner (personal contacts, technical capability, etc…)
• Limited exposure to commodity price volatility
• Non-cyclical customer demand
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DISTINCTIVE APPROACH…
DHP offers business owners and investors a proven value creation strategy that is
differentiated from traditional private equity firms
Vision Velocity Value
We see how to capture
opportunities others don’t
We deliver faster results
with greater confidence
We create high value
investment opportunities
• Define an executable
business strategy that:
- Meets unfulfilled
customer needs & wants
(e.g., functionality,
quality, service)
- Leverages untapped
latent capacity to fuel
growth & efficiencies
- Eliminates “waste” while
capturing opportunities
to enhance margins
• Implement business
strategy & help
orchestrate change
- Strategic investment of
growth capital
- Emphasize
opportunities the
business largely
controls
- Rigorous performance
management (e.g.,
cascade metrics/goals
throughout organization)
• Sustain business
enhancements through:
- Systems implementation
- Capability building
- Continuous improvement
culture
• Augment enhancements
with bolt-on strategy as
applicable
• Execute a defined exit
strategy from “Day 1” until
the liquidity event
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8. www.DarkHorsePartners.net
…YIELDING EXCEPTIONAL RESULTS
Rapid value creation at a $250 M general aviation aircraft company fuels strategic
growth
 Company’s growth was constrained due to delays in order fulfillment
and long product development cycle times
• Throughput constraints & inconsistent quality led to long delivery
leadtime (18 months vs. industry average of 6 months)
• Long product development cycle times
 Business systems were implemented to fuel innovation and achieve
“flawless” execution
• Redesigned the organization to connect dedicated support functions & disciplines to the frontline to
enhance problem solving speed
• Redesigned the process to eliminate waste and free up latent capacity
• Developed a formal product development process to cover “concept to production”
 A dominant market position was achieved which generated significant capital efficient profits which
was then used to fund expansion into a new product segment
• Achieved repeatable on-time delivery and quality
• Attained #1 top sales aircraft in its class displacing
the incumbent of 70 years
• Transitioned from negative to positive cash flow
in less than 2 years
• Enabled capital investments to develop a product for
the Very Light Jet market
Metric Before After Delta
Sales $50 M $250 M +500%
Gross Profit -0.1 +0.3 +400%
Leadtime (Months) 18 6 -66%
Productivity (Labor
hours per aircraft)
3,600 1,800 -50%
Order Changes (%) 95 <5% -95%
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