Arch Equity Partners

Arch Equity Partners connects its business operator’s mindset to a lower middle market, long-term hold investment strategy. We partner with management teams to build better businesses through operational improvements, a focus on sustainable growth strategies, and building professional management practices. Central to our investment philosophy is our partnership with investors who support a patient, longer-term horizon for their capital, and who are a key element in AEP’s partnership with the management teams to build stronger, more capable organizations through board representation and involvement in select operating and strategic efforts. Our focus on the lower middle market stems from a belief that this segment represents a larger well of unrealized potential value, plus it is where our partners and investors have spent a significant portion of their professional careers as business owners, CEO’s, and financial and operational advisers. We seek investments in companies that meet the following investment criteria: ▪ Revenue: $5 to $30 million. ▪ EBITDA: 1.5 million to 3 million, though we will consider EBITDA outside of the range if there is a compelling growth story or if EBITDA margin as a percent of revenue is above average. Where there are logical add-on acquisitions, we have no EBITDA minimums. ▪ Prefer trend over 2-3 years or more of positive revenue and EBITDA growth but not required; if there are not positive trends, then evidence of associated expense control to sustain EBITDA margin as % of revenue is required. ▪ Like to see company-created financial projections for next 3-5 years (income statement; balance sheet and cash flow if possible). ▪ Stable collection history on accounts receivable with no or very little exposure to accounts 90 days or more past due; same for accounts payable with no accounts past due for payment. ▪ Stable working capital relationship with no out-of-cycle spikes.