Hitting the Target
Penn Valley Group understands that growth is not a random occurrence but a calculated step that can be repeated if the right conditions exist and an effective formula is strategically applied. With this in mind, our investment practice targets closely held companies that fall into the following categories:
- Companies where liquidity is desired by the founder and management team
- Operating units of larger enterprises considered no longer strategic to a parent organization but with attractive market growth opportunity if properly capitalized and operated
- Other non-conventional investment opportunities where growth and profits are stable and capable of future growth
PVG has expertise in various fields and markets, but we typically concentrate on emerging and middle market companies within the technology, financial services, low-tech manufacturing/distribution, communications and business services related industries.
Scope of Investment
PVG seeks investment opportunities, ranging in size, in the form of either preferred equity or subordinated debt in privately held companies. Typically, these targets represent companies with existing revenues of $5-$25 million with a proven track record of profitability.
Structuring the Deal
Once a partnership opportunity is recognized, PVG will leverage private equity financing in a role of principal or co-investor. Consideration to PVG consists of:
- A carried interest in the form of an LP structure or structured with common and preferred stock
- A transaction fee of 1-2% of the capital investment
- Annual management fee that traditionally approximates 1% of annual revenue