/Investment Criteria
Investment Criteria 2018-04-22T15:13:32+00:00

Investment Criteria

RM³ (RMC) Capital seeks to be the majority equity investor in small businesses that meet the following investment criteria:

Transaction Types

  • Management buyouts
  • Family / Estate driven ownership succession planning
  • Underperforming and operationally challenged business
  • Restructuring
  • Owner and Succession Recapitalizations
  • Reorganizations
  • Partner buyouts

Favorable Characteristics of Targeted Companies

  • EBITDA of at least $200,000 (current or short-term potential)
  • Demonstrated recurring revenue between $1 and $10 million
  • Current positive free cash flow or attainable within short-term
  • Repetitive revenue streams
  • No major customer concentration

Geographic Criteria

RMC’s primary acquisition focus is in the Midsouth, although RMC will consider investing in companies throughout the United States.

Equity Investment Size

$200,000 – $2 million.

Control

Majority stake or clear path to control

Preferred Industries

  • Business, commercial, and financial services
  • Niche Manufacturing
  • Distribution and logistics
  • Healthcare related services
  • Technology-enabled manufacturing

Non-Targeted Industries

  • Real Estate
  • Retail
  • Consumer Products
  • Capital Intensive

Long-Term Investor

RM³ Capital’s typical goal is to own companies for the long-term with cash distributions of profits being made to all equity partners once the business is properly capitalized and current growth needs are satisfied. RM³ is willing to consider exit strategies such as a management buyout or strategic sale, a quick profit is not the principal goal of RM³.

  • Management Buyouts In this type of transaction the existing management team wishes to participate in the buy out or retiring or absentee owners. RMC will enter in as a majority owner and the management team will invest personal funds for the balance of the ownership. As part of a long term exit strategy RMC is willing to implement a time-based transfer of equity assuming certain financial parameters are achieved.
  • Family-driven ownership and estate succession planning. where an entrepreneur wishes to realize the financial rewards of his or her successful business while providing meaningful management roles and financial opportunities for the next generation.
  • Recapitalizations where the owners of a closely held business wish to take some equity of their business while continuing to retain a significant level of ownership and management responsibility. RMC can assume a lead ownership role and help grow the company and create further value allowing him or her a secondary equity exit sometime in the future.