Who we are & What we do
Cyprium specializes in providing capital solutions to privately held middle-market businesses that are owned by founders, families, entrepreneurs, independent sponsors and management teams.
Our capital solutions are structured using subordinated debt, preferred equity and common equity, individually or in combination thereof, offering flexibility and certainty of close.
Most often, a non-controlling investment is utilized in conjunction with senior debt when a company is looking to finance a strategic acquisition, fund organic growth, refinance the balance sheet, redeem or buyback the stock of inactive shareholders, form an ESOP and/or complete a minority recapitalization for personal liquidity purposes.
Cyprium’s Investment Criteria
- Investment Size: $5 million to $60 million
- EBITDA: Minimum of $4 million
- Sales: $20 million to $300 million
- Headquarters in the United States or Canada
- History of predictable cash flow
- Non-cyclical end markets
- Defensible market position
- Committed management team
- Manufacturing, distribution, business services, food and beverage, healthcare and technology-enabled companies
Industries We Target
The Cyprium team has invested in a wide range of industries since it was founded in 1998.
Those industries include but are not limited to:
- Aerospace
- Agriculture Products
- Automotive
- Building Products
- Beauty Schools
- Consumer Products
- Contract Cleaning
- Civil Construction
- Chemicals
- Contract Manufacturing
- Defense Contractors
- Disaster Repair and Restoration
- Distribution
- Environmental Services
- Equipment Manufacturing
- Fireworks Retail
- Food & Beverage
- Injection Molding
- Healthy Living
- Hobby Products
- Industrial Products
- IT Services & Software
- Laboratory Testing
- Movie Theaters & Family Entertainment
- Office Products
- Personal Protective Equipment
- Plastics & Packaging
- Promotion Products
- Recycling
- Rental Equipment
- Specialty Equipment Manufacturers
- Telecommunications
- Trucking
Demonstrated Ability to Add Value During the Investment
The team at Cyprium can help its portfolio companies with a wide range of strategic initiatives including:
- Acquisition sourcing, negotiation, financing and integration
- Operational improvements and lean manufacturing
- Organizational change, human resource recruiting for executive positions and design of compensation and equity incentive plans
- Assessment of IT upgrades, ERP implementations and production improvement initiatives
- Low-cost country manufacturing and sourcing alternatives
- Exit strategy optimization
- Leading or actively participating in strategic planning sessions
- Sharing best practices across portfolio companies
- Assessing the competitive threat and/or opportunity presented by lower-cost geographies
Our Reputation
- Leader in the non-control niche as our principals were among the first to target the segment
- Consistent focus on the middle market
- Agility in structuring transactions to meet the needs of our portfolio companies
- Rational and supportive approach leads to healthy collaboration
- Valuable advisor to management teams and business owners
Our Capabilities
- Sourcing and execution of acquisitions / financing
- Extensive network of financing sources, intermediaries, executives and project consultants
- Operational improvements
- Organizational change and executive recruitment
- Employee / management incentive plan design
- IT assessments and implementations
- Optimizing an exit strategy
A Non-Control Partner
For almost thirty years, Cyprium has pursued a strategy focused on making junior debt and minority equity investments in lower-middle-market companies that are owned by non-institutional shareholders such as families, entrepreneurs, independent sponsors and management teams.
Cyprium functions much like a traditional equity sponsor, providing strategic direction and operational support in a non-controlling role subject to the company’s initiatives. Moreover, it is available to offer guidance after the initial investment when the company solicits such services.
The firm believes its strategy is fundamentally different from either traditional private equity funds, which have a control mindset, or the sponsor-oriented mezzanine funds that provide capital in support of leveraged buyouts.
What is Non-Control Capital?
A non-control investment occurs when a private company needs more capital than its bank is willing to lend, but not so much capital that shareholders have to relinquish economic or voting control. This capital is junior to the senior debt and can be in the form of minority common equity, preferred equity, less-dilutive subordinated debt or a combination thereof. When a non-control investment solution is selected, the current ownership and/or management team retains the controlling interest in the company and continues to control the Board of Directors, economics, operations and strategic direction of the enterprise.
Flexible Capital for a Variety of Transaction Types
Cyprium supports well-managed lower-middle-market businesses with capital and guidance as a non-control investor across a variety of transaction types.
Cyprium pursues investment opportunities created by a variety of circumstances, including financing acquisitions and other growth opportunities such as facility and equipment expansion, the desire of shareholders for personal liquidity, the creation of an ESOP and balance sheet considerations such as refinancing or recapitalization. In addition, Cyprium tailors the structure of its securities based on the demands of the transaction and the preferences of the shareholders.
Cyprium’s Capital Facilitates a Wide Range of Strategic Corporate Initiatives
Growth Capital/Expansion
Outside capital is used to fund a current or projected business need in support of the ongoing or future anticipated growth of the business.
- Build a new facility or purchase equipment
- Introduce new products or services
- Support the working capital needs of the business
- Expand internationally
Recapitalizing a company can take a variety of forms. The two most common are majority and minority recapitalizations, but in practice, anytime there is a change in the capital table, a recapitalization occurs. The amount of new common equity relative to equity value of the enterprise and equity held by the other shareholders determines which shareholders will be in a controlling position post-close.
- This strategy is used for a variety of reasons, such as providing liquidity to shareholders, increasing the company’s financial stability or changing the control of the company
- For more information on this topic, please review our Minority Recapitalization Whitepaper
Shareholder buyouts, stock buybacks and leveraged dividends are methods of delivering liquidity for shareholders.
- Shareholders may be of different ages or have contrasting opinions on a variety of corporate matters including risk tolerance
- Transition of a family-owned business to subsequent generations
- The shareholders of a business can receive a cash dividend for liquidity and/or estate planning purposes with no required change in the overall management, structure or control of the company
- Buyout inactive or impatient investors by making a tender offer to redeem a select amount of stock at a market-based value
- In any of these situations, the remaining shareholders may increase their ownership by redeeming common shares with less dilutive subordinated debt or structured equity
Employee Stock Ownership Plan (ESOP)
ESOP transactions can deliver tax-advantaged liquidity options to the existing owners while providing full or partial ownership of the business to its employees.
- Despite perception, the selling shareholders are not required to sell their company at a discount to comparable market transactions
- Employee ownership offers a powerful incentive for employees to improve retention, productivity and ultimately profitability
Third-party capital is used to assist a company in making one or a series of acquisitions.
- The capital may finance a single acquisition or support a multi-acquisition strategy
- Non-bank, institutional capital can be particularly useful when acquiring a foreign entity, specific product line or service offering
- This is ideal when businesses require additional capital to affect an accretive acquisition
- For more information on this topic, please review our Acquisition Finance Whitepaper
Capital is provided to a business seeking a new financing partner or looking to reduce senior debt or total leverage by raising more patient equity capital or non-amortizing subordinated debt.
- Refinance a capital provider that does not understand the needs of the business or is not constructively supporting the company
- Appropriate for situations where the current lenders are looking for the shareholders to invest incremental equity or simply reduce senior debt to an acceptable level
- Non-amortizing junior capital may provide better flexibility with respect to the company’s immediate opportunities or long-term initiatives
The active managers of a business acquire a controlling stake from a shareholder base that is seeking liquidity.
- Incumbent managers are generally aware of the current majority owner’s exit timing and valuation expectations
- Management teams can often roll a minority stake in their business into a majority position
- The management team may be able to achieve some measure of liquidity at close depending on the circumstances of the transaction
- For more information on this topic, please review our MBO Whitepaper
Cyprium’s Team of Executive Advisors
Cyprium has an established council of Executive Advisors consisting of veteran middle-market executives with varying industry backgrounds and experience. They serve as an on-call resource to provide advice and input regarding potential Cyprium investments and portfolio company activity. These industry veterans bring knowledge and credibility to transaction processes and due diligence. Post-close, they can serve as peer counselors and networking resources for portfolio company executive management, represent Cyprium in board roles and work on a variety of projects alongside portfolio company management teams.
Investments By State
Cyprium Partners has invested in portfolio companies with headquarters throughout the United States and Canada.
Investment Footprint Since 1998
Not Included: Cyprium’s platform investment in ASIMCO Technologies headquartered in Beijing, China
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Portfolio Company Headquarters