Investment Focus
Industries, Transaction Types, & Investment Criteria
Industries with Mission-Critical Systems & Data
Sale-to-Service® (S2S®) candidates have mission-critical systems or data that are essential to whatever product or service the company provides. Leeward is industry agnostic and S2S® candidates can be found in all sectors but these industries have a high concentration of businesses that are a fit for an S2S®.
Transaction Types
An S2S® is a fit when value is moving out of a business or from one party to another. Leeward can also provide capital for growth or the recapitalization of existing debt but only when 35% or more of transaction proceeds are used for one of Leeward’s primary transaction types.
Liquidity Events
Leeward delivers a low-cost source of capital for owners seeking to diversify their wealth but who do not want an investor sitting at their board table.
Shareholder Buyouts
Leeward provides capital to owners seeking to buyout a financial partner or a passive shareholder or for when the partnership is no longer working.
Management Buyouts
An S2S is well suited for owners who would like to sell their business to management rather than to private equity or a strategic investor.
Family Transitions
Leeward supports families seeking to transition ownership and control to the next generation while delivering fair value to the company’s founders.
Acquisitions & Growth
Leeward provides strategic acquisition and growth capital for owners seeking an alternative to higher-cost debt and equity dilution.
Independent Sponsors
Under certain circumstances, Leeward can provide all capital allowing independent sponsors direct equity at close without investment hurdles.
Financial Criteria
Investment Size
$10 million to $150 million
EBITDA
$5 million to $50 million
EBITDA Margin
Ideally 10% or higher
Location
U.S. Only
Mission-Critical Systems & Data
These server-based intangible assets, found in most businesses, contribute to enterprise value but often have little to no value on the balance sheet. From an operating perspective, if these mission-critical assets were inaccessible for an extended period, the company would not be able to implement an entirely new system quickly enough to continue to serve its customers.
SAAS
Customized SaaS solutions used by an operating business may be a fit. Examples include customized Salesforce and NetSuite systems.
Licensed ERP
Heavily customized licensed ERP software hosted in a data center or the cloud is a fit for an S2S®. Examples of ERP providers include SAP, Oracle, and Epicore.
Proprietary
These systems are unique to the business. Even if a company is not considered tech-enabled, if it has proprietary systems, it is a fit for an S2S®.
Data
SKU, invoice, and other data are essential for a company’s operations making most data a fit for an S2S®. Personal data is protected in an S2S®.
Excluded Categories
C-Corporations
Entities taxed as C-Corporations are generally not a fit for an S2S®.
SaaS Businesses
If the company’s revenue is largely license income, an S2S® is not a fit.
Debt Recapitalization
If proceeds are used to exclusively payoff existing debt, an S2S® is not a fit.
