Southfield Capital has invested successfully in lower middle market businesses since
Over 75 years of collective Partner experience in the lower middle market
Deep sector expertise and extensive executive and business advisor network
Track record of building exceptional growth businesses
Proven commitment to partnering with owners
Large companies seeking to improve their return on invested capital continue to
shed non-core activities. Southfield Capital targets companies that offer products/services
that are essential to the customer and relatively insignificant to the customer's
overall cost structure. Businesses that fit this profile are more likely to have
high, defensible operating margins and stable customer relationships. These businesses
frequently compete locally in niche segments, resulting in opportunities to grow
organically by broadening service offerings and end markets and by executing an
Traditional bank lenders have pulled back meaningfully from many lending markets
due to increased regulation and more stringent credit requirements. Significant
opportunity exists for niche specialty finance companies to address the resulting
unmet consumer and commercial demand for borrowing. Specialty Finance firms frequently
compete in large, fragmented industries and have attractive organic growth opportunities.
Firms in this sector can scale rapidly and increase shareholder value with the support
of capital and an experienced, hands-on investor who can help drive an acquisition
strategy, introduce complementary products, enhance technological innovation and
professionalize the business.
Southfield Capital targets companies that have carved out a defensible market segment
and established deep customer relationships by providing unmatched service. Attractive
investment targets within this sector are clearly differentiated from their competitors
in their ability to enhance meaningfully the product value and the customer experience.
Value enhancement can come in myriad forms, including product customization, repair
and maintenance services, supply chain integration and rapid product delivery. Whatever
the method employed, a value-added distributor is able to preserve pricing power
and generate sustainable, attractive EBITDA margins, often in excess of 10 percent.