Acquisition Criteria

Targeted
Industries

Targets for acquisition include a broad array of businesses providing manufactured products, materials, and services to industrial, commercial and consumer customers.  See Industry Examples below.

Candidate
Profile

Candidates include lower-middle market sized privately held companies, and small divisions of public companies. We generally prefer a control position, but also pursue minority growth-equity investments.

Competitive
Profile

D2 prefers companies that are strongly positioned in their market segments with unrealized potential for growth, either through internal growth or add-on acquisition. We also seek to consolidate fragmented industries through acquisition.

Size

We are generally interested in companies with annual revenues in the range of $10 to $50 million. D2, in conjunction with its equity partner, Freestyle Capital, has the ability to invest equity of $3 to $20 million per transaction. We can complete larger transactions in conjunction with prior investment partners.

Financial
Performance

We will consider both profitable and underperforming businesses, including companies in need of capital restructuring.

Transaction Structures

A typical transaction provides all cash consideration to sellers, or can take the form of a majority or minority recapitalization. We also will structure transactions with a combination of cash, notes and an earn-out or similar performance incentive component.

Operating
Management

Our preference is to retain existing management and provide considerable operating autonomy. We typically team with key managers and provide attractive equity incentive programs based on performance. As appropriate, we can engage executives from our network to serve in operationally-focused board roles, or in interim roles if necessary.

Location

D2 prefers companies headquartered in the eleven western U.S. states and Texas that serve North American or global markets.

 

Industry Examples
Examples of industries in which D2 has interest and expertise are listed below.  In addition, the broad backgrounds and operating expertise within our networks cover a large array of other manufacturing and service sectors.

  • Aerospace Components, Systems and Services
  • Business Services
  • Cleantech, including alternative energy, energy efficiency and water-related products and services
  • Communication and Identification Products and Systems
  • Composite Materials and Structures
  • Consumer Products and Services
  • Control Systems and Assemblies
  • Defense Systems and Products
  • Diagnostic and Process Control Products, Systems and Services
  • Electrical Products and Systems
  • Electronics Products
  • Environmental Products and Services
  • Global Outsourcing and Logistics Services
  • Government Infrastructure Development and Support Services
  • Industrial Support Services
  • Life Science and Healthcare Products and Services
  • Liquid and Air Handling Equipment and Services
  • Packaging Systems and Materials
  • Power Systems, including internal combustion engines and related equipment and services
  • Specialty Chemicals, including resins, coatings and adhesives
  • Specialty Metals and Alloys
  • Surveillance, Detection and Analysis Products and Services
  • Value-Added Distribution Services
  • Vehicular Systems, Parts and Accessories