What types of companies do you invest in and why?
We invest in lower middle market companies where we see opportunities for operational improvements and growth. We invest in sectors where we have expertise, which includes healthcare, services, manufacturing, technology, retail and consumer, and transportation and logistics.
Where are they based?
Our companies are all based in North America, primarily in the U.S.
How do you find them?
Our firm has been actively investing in the lower middle market for over 25 years. In addition to the relationships of our investment professionals, and an extensive network of attorneys, restructuring professionals, bankers, advisors, and financial professionals that regularly refer us deals, we have an in-house new business development group that calls directly on lower middle market companies and intermediaries across the U.S.
What, in your opinion, is the best investment the company ever made?
Allegiant Travel (NASDAQ: ALGT). This was a company that created a unique, low-cost “destination specific” airline model, bringing travelers to one of the top destinations in the U.S. – Las Vegas – from tertiary cities all over the country. Our capital investment and expertise allowed them to execute on the strategy, and expand the concept to other top U.S. travel destinations, such as Orlando. We returned over six times invested capital to our investors in less than two years.
What is the average size of your investment (in dollars)?
Our average investment is $25 million – $50 million.
What industries do you invest in and why?
We invest in industries in which we have experience and particular operating expertise or resources we can bring to bear. Historically, our core focus has been on healthcare, services, manufacturing, technology, retail and consumer, and transportation and logistics.
If you were to add an industry, what would it be?
While we maintain a focus on a core set of industries, we will broaden our focus and look at other industries provided we believe we have the proper internal expertise and operating resources for us to execute our strategy.
What industries are hot in South Florida?
Companies of managed care that align with the Affordable Care Act’s focus on cost containment and quality of care currently present opportunities for Comvest.
What criteria do you use to understand if a company is a good investment?
On each investment, we undertake a very detailed due diligence process. The process includes, among other things, assessment of the market and competitive dynamics of a company, its position in the industry, strength and specific experience of the management team, outlook and sustainability of the profit margins, recurring nature of revenue, barriers to entry, historical and financial performance and current financial performance, opportunity to improve financial performance and growth, valuation of the investment and anticipated exit opportunities.
What is your most recent investment and why did you make it?
BEL USA. BEL USA is an online promotional products company based in South Florida that has created a competitive advantage by integrating its supply chain. BEL USA offers the lowest cost and best quality product to customers seeking customized mugs, t-shirts, pens, etc., and has built a highly successful business. Since BEL USA runs its own website (www.belpromo.com), printing, warehouse and distribution, the company is able to provide a reliable, cost effective product to its customers, and has sustained rapid growth. We believe that growth can continue.
Why are you based (or have an office) in South Florida?
While our business can be located almost anywhere on the U.S., South Florida offered a unique opportunity to partner with highly successful and experienced local operating executives who, after achieving a degree of success, have relocated here, either full-time or part-time. These executives and the knowledge we’ve been able to gain from them have been invaluable to our organization, and much more difficult to attain in places like New York City where we were based before relocating to Florida in 2003. We have also found it to be a competitive advantage when winning over management teams for our portfolio company investments as there is often a comfort level for smaller companies in dealing with a private firm located in South Florida rather than larger firms in big cities.