We Buy Orange County, California based businesses
At Minerva Equity we are an investment and acquisition company with a focus on small and mid-sized businesses. We primarily look at businesses that are based in the Western United States. We are fortunate enough to have a portfolio of well run businesses in a variety of sectors. One pattern that we have notices across all of our business holdings is that we have found that the businesses run by great managers and well motivated employees are the ones that we have success with. This is why we have developed a narrow focus on businesses that we believe have a very strong management team.
Many of our acquisitions and investments have come in when companies have owners that are retiring or transitioning ownership to a younger generation. While we are always looking to make a sizable return on our investment, we focus on the long-term growth of the business and are willing and eager to reward key employees with equity.
Types of businesses we buy
At Minerva Equity, we focus on quality management teams and quality reputations. It is our view that we can do this in a sector agnostic fashion with a few caveats.
One caveat is that we only invest in businesses that we understand. This means that businesses in the biotech sector may not be a fit as we don’t feel as though we can make a wise investment decision. Businesses that have a large amount of political risk such as cannabis are also not areas we have traditionally invested.
As investors, we don’t have our boots on the ground everyday running the business. We rely on well trained, honest managers to run the businesses. We continue to come down to the fact that we want to invest in a high moat business with a great management team.
On occasions, we will elect to invest into local distressed businesses. We will typically only do this when we already have a successful business holding in the location and industry that we believe that we can successfully combine this business with.
Our Investment Process
While we typically buy companies in scenarios where the owners are retiring, their departure does not always have to be for retirement. Throughout the hundreds of companies we have looked at we have seen a number of partnership dissolving, companies spinning-off from one another and serial entrepreneurs moving on to their next business idea.
When we initially evaluate a company, we will ask for an overview of the business, financial history and all accompanying documentation that will allow us to trace the company back at least a few years if not to its inception. We will conduct preliminary due diligence at this point. If interested, we will schedule a time to meet with the owners for lunch, discuss how the transition could work and to view the current facility.
During this meeting, we will dive further into the transaction structure, hear what the current owners expectations are and share our own. Typically we’ll leave this meeting and have an understanding whether or not this is a transaction that we are interested in pursuing.
Many private equity firms or small business buyers will look to do a complete due diligence pre-close. However, we have elected to typically not have a 60-90 day window pre-close. Our due diligence process typically calls for 15-20 days to close with another 30 days to transact due diligence and get capital to finance the down payment.
Since our focus is on the lower mid-market (generally defined as businesses generating less than $10M in annual profit) and since we have a great credit profile and relationships with lenders, we are able to get preferable financing terms for our acquisition. Therefore, our typical transaction structure is a leveraged buyout.
For business owners and executives that may be looking to transition, we invite you to contact us to discuss how we may be able to make you an offer for your business.