Alaris Equity Partners stands as a prominent private equity firm, distinguished by its strategic focus on fostering growth within established private businesses. Unlike conventional private equity models, Alaris specializes in providing alternative financing solutions, designed to empower business owners while preserving their operational control. This approach makes them a unique player in the North American investment landscape.
Investment Strategy and Focus
Alaris Equity Partners targets investments in lower and middle-market companies across a diverse range of industries. Their investment scope is broad, encompassing management buyouts, growth capital infusions, industry consolidations, and investments in mature businesses. However, they strategically avoid sectors with declining asset bases, such as oil and gas resource companies, and industries facing rapid obsolescence, like high-tech. Instead, Alaris concentrates on sectors demonstrating stability and growth potential, including:
- Business Services
- Professional Services
- Information Services
- Healthcare Services
- Distribution & Logistics
- Industrials
- Consulting Services
- Consumer Products
- Construction Related Services
This focused approach ensures that Alaris’s expertise and capital are deployed in sectors where they can drive significant and sustainable value creation.
Tailored Financing for Business Owners
A key differentiator of Alaris Equity Partners lies in their understanding of business owners’ needs. They cater to companies seeking capital for various strategic initiatives, such as partial liquidity events, generational transfers, recapitalizations, and growth initiatives. Critically, Alaris structures its investments to appeal to business owners who wish to maintain operational control and avoid the high-leverage risks often associated with traditional private equity deals. They typically favor companies that are family or individually controlled, respecting the legacy and vision of the founders.
Financial Partnership Model
Alaris Equity Partners operates through an alternative financing model. They provide capital to a diversified portfolio of private businesses, termed “Private Company Partners,” in exchange for royalties or distributions. This model is centered on generating consistent and predictable cash flows, which in turn supports stable dividend payments to Alaris’s shareholders. This focus on sustainable income distinguishes them from firms primarily driven by capital appreciation through equity stakes. Alaris strategically invests across Canada and the United States, seeking companies with strong financial profiles.
Investment Parameters
Alaris typically invests between $30 million and $150 million, targeting companies with enterprise values ranging from $10 million to $400 million. Ideal candidates demonstrate an EBITDA between $5 million and $50 million, with a historical EBITDA exceeding $10 million. They also prioritize companies with low levels of debt and capital expenditure, indicating financial health and stability. While their typical investment size is in this range, Alaris also considers smaller investments, up to $20 million, in private companies with historical EBITDA above $2 million. For larger, compelling opportunities, they possess the flexibility to structure transactions involving additional capital.
Key Investment Philosophies
Alaris Equity Partners emphasizes investing in industries that are resilient to cyclical economic downturns, ensuring the stability of their portfolio’s income stream. Importantly, Alaris does not seek equity ownership or board representation, reinforcing their non-control partnership approach. They invest directly from their balance sheet and prioritize equity dividend distributions from their portfolio companies. Their investment strategy leans towards non-control equity positions, including both minority and majority investments, always with a focus on partnership and alignment with existing management.
In conclusion, Alaris Equity Partners offers a distinctive private equity approach, centered around providing growth capital and strategic financial partnerships to established private businesses in North America. Their focus on alternative financing through royalties and distributions, coupled with their non-control philosophy, positions them as an attractive partner for businesses seeking growth while preserving their operational independence.
