Investment Approach

Criteria for Investment Selection

Brazos targets high-potential businesses for investment. Regardless of whether the business is currently experiencing strong financial results, Brazos is well equipped to identify businesses that have underlying intrinsic value and long-term growth potential. By leveraging the insights and acumen of its investment team and the experience of operating executives and management, the firm has built a track record of identifying and developing what is often times hidden value.

Attractive investment characteristics for a Brazos investment include:

  • Businesses that operate in attractive niche markets where a long-term leadership position can be sustained
  • Stable and growing cash flow
  • Strong and visionary management that is capable of executing strategies to enhance operating performance and drive growth
  • Attractive industries with solid fundamentals and some degree of fragmentation to support add-on acquisitions
  • Multiple exit opportunities

Partners with Management

Brazos partners with management to evaluate, acquire, and transform high-potential businesses. The firm’s goal is to combine the insights, experience, and operational expertise of management with our investment strategies and wealth of resources and relationships. Working together, Brazos and management are able to transform businesses and create value.

The firm adds considerable value at the board level via key insights related to strategy, long-term planning, and competitive positioning for the business. However, Brazos understands that management provides the in-depth knowledge and first-hand expertise required to operate the business. For this reason, the firm appropriately empowers management to make decisions and capitalize on their vision.

Strategies for Value Creation

In partnership with management, Brazos applies a proven strategy to generate long-term value creation for its investors. This strategy, which we refer to as Maximizing the Middle Market®, includes the following elements:

  • Acquire in partnership with management
  • Enhance the business by implementing value creation strategies
  • Accelerate growth by leveraging key investments and growth strategies
  • Profit with management by unlocking the value of the business via a sale, IPO, or recapitalization

Parameters for Investment

The Brazos investment parameters are outlined below as general guidelines.

  • Enterprise value of $50 million to $500 million, except in the case of add-on acquisitions for existing portfolio companies
  • Equity investments of $25 million to $100 million
  • All regions across the United States
  • Transaction types include buyouts, recapitalizations, CEO-backed buy-and-builds, corporate divestitures/divisional spin-offs, and public-to-privates
  • Brazos has historically had success with buyouts and recapitalizations of family owned or closely held businesses structured in creative ways
  • Primarily control investments but the firm will entertain non-control structures with like-minded investors

The ultimate determining factor of whether Brazos pursues a deal is whether or not those attractive investment characteristics outlined above are present and the firm has confidence its investment approach and value creation strategy can be applied successfully.