Investment Strategy

Farragut works closely with entrepreneurs, private equity sponsors, independent sponsors, senior lenders, and directly with management teams to provide flexible debt and equity solutions including unitranche debt, subordinated debt and structured or minority equity.  Our capital supports acquisitions, growth initiatives, recapitalizations, ownership transitions and refinancings. 

Our continuous focus on lower middle market mezzanine investing over the course of our careers has given us a unique appreciation of the challenges and opportunities facing small businesses at this end of the market.  Our investment professionals have worked together for nearly two decades and have more than 75 years of combined investment experience focused on the lower middle market.  That experience has shaped our investment philosophy.

Investment Criteria

INVESTMENT STRUCTURE

  • $4 million to $15 million per deal

  • Mezzanine debt & equity

  • Flexible structuring tailored to the underlying situation

  • 5-7 year investment horizon

  • Growth financings, recapitalizations, buyouts, and debt refinancings

TARGET COMPANIES

  • EBITDA of $2 million or greater

  • Proven, asset-light business models

  • Stable or growing cash flow

  • Unique & defensible market position

  • Strong & committed management teams

  • Potential for near-term accelerated growth

PREFERRED INDUSTRIES

  • Business services

  • Industrial services

  • Light manufacturing

  • Value-added distribution

  • Healthcare

  • Consumer

We believe the lower middle market offers attractive opportunities to invest in established companies with strong management teams, defensible competitive positions and meaningful growth potential. At the same time, smaller companies often have financing needs that are not fully addressed by traditional capital providers. Farragut seeks to fill that gap. We provide flexible debt and equity capital while investing primarily as a non-control partner. Our objective is not to manage our portfolio companies, but to support the owners, sponsors and management teams who do.