Strategy & Approach

Our Investment Strategy & Approach

Watervale Equity Partners was founded with the purpose of investing in and partnering with lower middle market manufacturers and distributors of industrial and consumer products. With decades of investing and operations experience, we are able to collaborate with management teams during the diligence process to identify and evaluate potential opportunities for growth, talent and resource development, and operational improvement.  We then partner with management teams to prioritize and execute those opportunities post-acquisition.  We believe that this collaborative, partnership approach has been and will continue to be a key driver of our team’s success.

Our track record at Linsalata Capital Partners includes
$0 million
of attributed equity investments in industrial, consumer, and distribution businesses

 

 

We work closely with our portfolio companies to help develop the strategic direction and key initiatives, and we rely on management teams to execute and manage the day-to-day operations. We believe that a talented and experienced team is one of the most foretelling attributes of a successful investment.  Accordingly, we recognize the importance of aligning management and stockholders through meaningful incentive programs tied to performance.

There are a number of strategic levers we look to pull in order to enhance financial performance, improve operations, and ultimately create equity value within our portfolio companies. Each situation is different but our experience provides an extensive playbook of relevant tactics and transferable strategies.

Management

  • Align incentives with executives
  • Develop organizational design and develop team
  • Build depth and breadth
  • Help business owners create and execute a succession plan if necessary

Accelerate Revenue Growth

  • Invest in the sales & marketing organization
  • Invest in new products and services
  • Further penetrate existing customers
  • Enter new geographies
  • Invest in capacity & sales initiatives
  • Make add-on acquisitions

Improve Profitability
and Cash Flow

  • Sourcing: drive down input costs (material, labor, overhead)
  • Mix: sell more higher-margin products
  • Pricing: raise prices faster than input costs, seek out discontinuities
  • CapEx: Invest where pay-off exists
  • Improve efficiency by developing a metrics-driven organization
  • Grow EBITDA faster than sales through operating leverage
  • Use free cash flow to pay down debt and increase equity returns

Drive Exit Valuation Multiple

  • Accelerate growth rates
  • Margin expansion
  • Consistent performance
  • Market leadership, solid share position
  • Improve customer / vendor diversity
  • Robust systems and well-run operations
  • Strong, deep organization
  • Ensure proper governance, risk management, financial processes and health & safety practices to create a “clean” business
  • Average down effective entry multiple via add-on acquisitions