As a diversified industrial growth company, our goal is to generate free cash flow through sustainable organic growth and operational efficiency and through accretive inorganic growth, supported by a stable platform and a strong balance sheet.
This strategy builds on the investment philosophies and expertise of our former parent company, Capital Southwest Corporation, which has invested in more than 245 companies since 1961.
To accomplish our goal, we seek to execute strategic acquisitions that build on each of our three operating segments with products that can benefit from our ability to enhance performance.
Our acquisition criteria are as follows:
- Companies with product lines that complement or enhance our existing portfolio:
- Products and solutions sold to professional plumbers, heating, ventilation, air conditioning, electrical, and commercial construction contractors
- Architecturally-specified building products to improve the safety and aesthetics of major commercial and multi-family construction projects
- Specialty oil/grease lubricants, fluids, and lubrication management products that help maintain and improve the reliability of mission-critical equipment
- High performance industrial coatings and linings that increase longevity and protect valuable capital assets from harsh environment
- General product attributes:
- Maintenance, Repair, Overhaul (MRO) and consumables that have less cyclicality than Original Equipment Manufacturing (OEM)
- Use in severe-duty applications with “never fail” qualities
- Asymmetry between product cost and the value it creates or protects
- Niche applications that are subject to rigorous qualification, certification, or code compliance
- Sustainable competitive advantage and/or long-term recurring revenue
- Systems and solutions that solve problems preferred over point products
- Companies that operate in fragmented industries with potential synergies from consolidation, and/or have high-growth end customer segments
- Companies that could quickly benefit from CSWI’s shared services, manufacturing best practices, and broad industry relationships, and distribution channel
- Companies with a track record of innovation
- EBITDA in excess of $1.5 million
To ensure we protect value drivers across all our acquired businesses, we integrate acquisitions by applying industry best practices for strategy development, people management and retention, operating performance and measurement, corporate governance, and other business fundamentals.