Equicapita believes that there are compelling reasons for making private equity investment in the Canadian SME market which is experiencing one the largest generational transfers of wealth as boomer entrepreneurs retire and sell their businesses. The investment has a number of key drivers including:
- Generational opportunity to acquire “baby boomer” SMEs: There is a demographic opportunity to capitalise on the accelerating turnover of baby boomer owned, western Canadian SMEs. According to CIBC “An estimated $1.9 trillion in business assets are poised to change hands in five years — the biggest transfer of Canadian business control on record.”
- Attractive target market: There is a private equity funding gap in the $2 to $20M range is often referred to as the “Nano Gap”. This creates an attractive environment to acquire low cost, stable cash flow streams.
- Market access: SME investments can generate high returns but these investments are difficult for retail investors to make directly. Equicapita provides retail investors with access to this asset class.
- Buy and hold strategy: Equicapita does not use the traditional PE business model: acquisition, aggressive expansion capital, followed by an exit. Equicapita’
About Equicapita: Equicapita is a Calgary-based private equity fund focusing on acquiring Canadian SMEs that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita generally seeks to acquire businesses:
- at what it believes are reasonable prices;
- with a demonstrated history of free cash flow greater than $1 million per annum;
- with a durable competitive advantage;
- that operate in industries that Equicapita believes have sound long-term macro prospects;
- with ongoing participation of senior personnel;
- with the ability to maintain the cash flow without disproportionate amounts of new capital
- where Equicapita can partner with management and align their interest with Equicapita through tools such as earn-outs, vendor take backs and management incentive plans;
- to be held for the long term;
- where there is some potential to grow sustainable free cash flow, but where that growth is not essential to generate suitable returns.”
Please contact Greg Tooth (email@example.com)
This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate,"