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  Leverage Buyout Pledge Fund

Providence Capital Partners One, LP, a Delaware limited partnership, (the "Partnership") is a newly formed ten million dollar ($10,000,000) private equity fund. The Partnership expects to increase fund size up to twenty-five million dollars ($25,000,000).

The Partnership is seeking to acquire small companies through the use of leveraged buyout financing, typically in coordination with the management of the companies being acquired. The Partnership is seeking to create a diversified portfolio of four (4) to six (6) smaller companies with a history of strong revenues and earnings, stable balance sheets, and strong management teams in place.

Acquisition criteria generally involves a company in a basic industry, with gross annual revenues over ten million dollars ($10,000,000), adjusted earnings of at least one million dollars ($1,000,000), an asset to debt ratio of at least 2:1, an operating history of at least ten (10) years, and a strong management team in place. Real estate as part of the transaction is generally considered a plus.

A typical transaction is expected to involve a sales price in the range of four (4) to five (5) times earnings, with one-third (1/3) cash down, one-third (1/3) financed by a bank and one-third (1/3) in the form of seller participation and an earn-out.

While the Partnership does not target any specific industry, it will tend to focus on traditional growth industries, such as chemicals, communications, consumer products, health care, hospitality, industrial, manufacturing, media, telecommunications, and other traditional services and industries.

The Partnership will not consider start-up companies or venture capital situations.

The Partnership will only consider companies in the continental United States.

The General Partner of the Partnership is Providence Capital Partners One, GPLLC, a Delaware limited liability company.

The Partnership seeks to acquire companies that it believes it can increase earnings at a rate of ten percent (10%) to twelve percent (12%) per year. By growing a portfolio company at this rate, the company should double its earnings in approximately six (6) to seven (7) years.

The Partnership envisions a long-term hold period, and an exit strategy that consists of a sale of the stock or assets of the portfolio company, which may include an initial public offering ("IPO").

The Partnership operates as a "pledge fund" which gives Limited Partners the right to vote "yes" or "no" on whether or not to participate in any portfolio company acquisition.

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