Junior Capital

Investment Range

$5-$20MM

Revenue

$10-$100MM

EBITDA

$3-$10MM

Investment Approach

Tecum Capital Partners III, L.P. is a $300 million SBIC fund that focuses on making mezzanine debt, minority equity, and opportunistic control equity investments. We are currently investing out of Fund III (2021 vintage), which represents a continuation in strategy and focus of its predecessor funds, Fund II (2017 vintage) and Fund I (2013 vintage). Fund II successfully deployed over $265 million in 28 companies. Fund I, which operated under the namesake FNB Capital Partners, L.P., successfully deployed over $180 million in 26 companies. Prior to Fund I, Tecum’s founding partners invested over $55 million in capital as a merchant banking subsidiary of a regional bank. Combined, Tecum has completed over 135 platform and add-on acquisitions.

Junior Capital Fact Sheet

Investment Criteria

EBITDA: Between $3 to $10 million

EBITDA Margin: Greater than 10%

Gross Leverage: Less than 4.0x EBITDA

Geography: Primary operations in the U.S.

Hold Period: Up to seven years

Transaction Types:

  • Acquisition Financing
  • Family Wealth Transfer
  • Independent Sponsor Buyouts
  • Leverage Buyouts (LBOs)
  • Management Buyouts (MBOs)
  • Minority Recapitalizations

Target Industries

  • Business Services
  • Capital Equipment with P&M
  • Consumer-Oriented
  • Food & Beverage
  • Healthcare Services
  • Industrial & Environmental Services
  • Precision Manufacturing
  • Transportation & Logistics
  • Value-Added Distribution

Targeted Company Characteristics:

  • Committed management team
  • Defensible market position / differentiated product or service
  • High barriers to competitive entry
  • Market leadership in sustainable and non-cyclical growth niches
  • Strong free cash flow characteristics
  • No real estate ventures, start-up investments, project financing, or bridge loans

Our Model

Tecum's Formula For Success

How we create value via mutually beneficial transitions

Phase One

Find the Right Partner and Align Common Goals

  • Find the right partner in terms of sponsor and operating partners
  • Target industries we know well with positive secular tailwinds
  • Look for passionate management teams and business owners within those industries
  • Structure the transaction correctly to ensure a balanced partnership
  • Lay out key goals and associated milestones for the company

Phase Two

Develop Strategic Plan with Executive Team

  • Build strong relationship with key decision makers at the company
  • Understand company’s value-proposition to its clients
  • Collaboratively develop value creation plan through internal expertise and network of external resources
  • Understand needs of management team to effectively execute on plan

Phase Three

Empower and Support the Executive Team

  • Fill in any gaps in the management team to ensure execution of strategy (if applicable)
  • Bring deep network of resources to support both temporary and permanent needs
  • Allow management team to execute on strategic plan and support as needed

Phase Four

Execute Strategic Plan and Continually Re-Assess

  • Create objective measurable to assess the success of the strategic plan
  • Continually assess the strategic plan and pivot on a proactive basis as business environment continually changes and evolves
  • “We are not trying to shove a square peg in a round hole”

Junior Capital Companies

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