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| " In the long run, men hit only what they aim at " |
| - Henry David Thoreau |
Walden seeks to invest in niche businesses with strong, proven management
teams and defensible competitive advantages. Walden believes that such transactions
can be found in a variety of industries, including
manufacturing, distribution, information technology, software, hardware, and
healthcare and medical-related companies.
A typical investment for Walden ranges from $2-4 million; however, the
initial round may be as low as $1 million. For larger
transactions, Walden co-invests, through its extensive
network, with other private equity funds and SBICs. Walden
will lead deals in the Northeast and Mid-Atlantic regions and
will co-invest in other areas of the US when there is a strong
regional lead investor.
Walden's investment team has experience with a variety of transaction
structures, including expansion-stage private financings,
management buyouts, leveraged buyouts, PIPEs, ESOPs,
recapitalizations, and roll-ups. Walden generally invests in
equity or equity-like securities and is willing to trade
current dividend or interest payments for the potential of
greater future equity value. Most importantly, Walden believes
that management should have a significant future stake in the
business through direct equity ownership or
options.
In addition to experienced entrepreneurs, Walden looks for companies with
2-3 years of operating history which are at or near cash flow
breakeven. Walden occasionally invests in earlier stage
transactions on an opportunistic basis where the management
team and competitive advantages are
compelling.
As an SBIC, Walden Capital must conform to certain regulatory requirements
regarding eligible investments. To be eligible for
consideration, the business must generally meet the following
pre-investment criteria:
- Average after tax net income over the last two years must be $6 million or less;
- Tangible net worth must be less than $18 million and;
- A majority of the business' activities must be conducted in the United States and its territories (as represented by a portion of tangible assets or employees).
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