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About Monument

About Monument Capital Partners

Monument Capital Partners is an Indianapolis-based private equity firm that manages our family of funds. Monument focuses on taking control stakes with existing and/or new management teams in a distinct segment of the lower middle market. We purchase manufacturing, value added distribution and industrial service businesses located primarily in the Midwest with valuations of between $5 and $20 million.

Monument Capital Partners team has over 20 years of experience investing in the lower middle market, and has developed investment and operational expertise across a broad range of issues and industries.

What is our Strategy?

Monument Capital Partners provides equity capital, primarily for small historically profitable, manufacturing, value added distribution, and industrial service companies with defensible niches, located in the Midwest. Monument’s focus is primarily in companies with market capitalizations below $20 million. We believe investing in such companies allows us to maximize returns by:

  • Applying a disciplined approach to valuation
  • Creating operational and organic value by developing a more professional organization
  • Purchasing companies in the market where less competition and efficiency exists at the lower end of the middle market
  • Understanding small companies and leveraging on their past success and what it takes to actively manage in this space

We typically look to acquire companies with the following characteristics:

  • Price of entry at multiples at or near 4.5 to 6.0 times EBITDA
  • Historically profitable with proven track record
  • Predictable and growing cash flows to service debt
  • Defendable niche industries where the company is a leader in that industry
  • High quality incumbent management or outside professional managers
  • Several exit opportunities that may include: Recapitalization with a longer hold period or a Sale to financial or strategic buyers.

What is the Monument Capital Partners Philosophy?

Monument’s philosophy upon acquiring a company is to first understand what makes the business successful and who makes the business successful at all levels. We do not believe in immediate and wholesale changes upon the acquisition of a company. Monument invests in a business because of its track record and its penchant for continued success. The “Monument Philosophy” is to invest time in understanding the company during the first 6-12 months of ownership. We believe it is important to learn how the company has succeeded for the years prior to our ownership. Since Monument views itself as an owner, not just an investor, we spend a significant amount of time prior to the acquisition to coach management teams on learning the business and its culture before making changes to a company. Ultimately, after Monument and management have had time to learn and understand what has made the company successful, changes may be implemented that will help enhance the business. We believe following this philosophy allows for greater mutual respect and confidence in our teams and mitigates the risk involved in alienating team members, thus creating more predictable long term value. We are acutely aware that change after an acquisition will be inevitable for many reasons; however, we strive for change for the right reasons, not just for the sake of change.

Monument Capital has Midwest Regional Focus and Deal Sourcing.

Because of our active involvement in the management and ongoing affairs of our companies, we seek opportunities that are located in the Midwest. The founders of Monument have lived and worked in the Midwest their entire lives and, as a result, have built many close relationships with regional intermediaries and deal sources, in addition to historical relationships with bankers, mezzanine lenders, lawyers, and accountants. We market primarily to Indiana, Wisconsin, Ohio, Michigan and Illinois, and will evaluate opportunities outside the Midwest, if sponsored by one of our intermediaries. Monument has been serving the Midwest for well over a decade, Monument has developed strong bonds and relationships that we draw upon to access opportunities and capital.

Monument Capital Targeted Industries.

Although we evaluate industries where we have achieved previous investment success and/or where management team members have spent time in operating positions, we are generally agnostic with respect to industry focus. We seek dominant leaders in manufacturing, value added distribution, and industrial service opportunities where the company has a defensible business model and good growth opportunities, regardless of specific industry classification. Additionally, we seek to leverage the experience of key senior executives whom have been successful in their respective industries and represent a complement to the investment.

Management Equity Participation.

We believe management equity participation is critical to the success of any investment as it promotes alignment of all business and economic interests while striving to create overall shareholder value. Monument believes management determines the company’s success regardless of the strength of the business fundamentals, cash flows, or historical performance. We typically do not take a “class” approach to equity by dividing the equity into preferred equity and management’s equity into common. Rather, we prefer to invest alongside management at the same layer of common equity to promote a unified approach to growing and developing the business. Additionally, every Monument CEO partner is a board member of their respective company. Monument typically allows company executives to invest in three ways, (i) carried equity interest that vests over the life of the investment, (ii) purchased equity (at the same price as Monument’s equity) and (iii) incentive equity. As a result, management generally owns a significant (10%-25%) amount of the company. We pay our management partners market salaries and incentive bonuses; however, equity ownership is the primary compensation motivator for each manager.

MCP2 (Monument Capital Partners 2, L.P.)

equity oriented (control equity stakes)
recapitalizations
management & leveraged buyouts
transition transactions
manufacturing, distribution & service
$1 million to $3 million equity / some junior capital investments
$5 million to $25 million enterprise value
   

MCP1 (Monument Capital Partners 1)

mezzanine oriented (sub-debt with warrants)
management & leveraged buyouts
transition transactions
recapitalizations
manufacturing, distribution & service
$750,000 to $2 million investments
all remaining capital has been invested
 


Preferred Investment Situations

Company, Product, Industry Affinities


 
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