Building Successful Companies in Partnership with Management
The Zabel Companies (“Zabel”) is a private investment firm dedicated to partnering with management teams to invest in and build private companies over the long-term (5 to 15 years). Whether through a buyout, recapitalization or injection of growth capital, Zabel’s strategy is to work closely with management to steadily grow businesses and to build value for all parties involved.
Zabel does not limit its investment activity by industry or geography, but rather focuses on the fit with management and the opportunities to grow a business.
The Zabel team has a hands-on and collaborative style built through years of working in close partnership with management teams and owners and delivering value-added resources to lower middle market companies. In addition to providing flexible capital to meet each company’s unique needs, we function as a pool of resources on which our partners can draw to accelerate their growth and build stronger, more stable businesses. If you feel Zabel may be a fit for you or your business, please give us a call or continue to explore our website further.
The belief that the success of our investments will be determined by the strength of our partnerships drives everything we do at Zabel. To us, partnership means establishing a working and economic relationship that is highly rewarding for all parties involved. It means embracing what has driven success historically, and introducing new resources that can build upon those past successes.
When speaking to track record, most investors discuss multiples of money, internal rates of return (IRR) or various other return metrics. We also look at the quality and effectiveness of our partnerships and our ability to address the unique needs of each business when we measure our success.
We always encourage prospective partners to contact existing and past management teams to gain a better understanding of our commitment and approach.
We are Neither a Typical Private Equity Group or an Independent Sponsor
We have a unique and stable source of committed capital, which enables us to move quickly and be creative. We can invest as little as $7.0 million or as much as $30.0+ million per transaction. We are not interested in quickly flipping investments. We take a steady and measured approach to building businesses over the long-term. Importantly, we have never exited an investment due to pre-determined investment periods dictated by partnership agreements.
We Get It: Lower Middle Market Businesses Are Different
During our seventy-five-plus years of collective experience, we have worked exclusively with lower middle market companies. We understand the nuances, opportunities and unique challenges often present in both family businesses and private companies. Our understanding of and experience working with lower middle market companies enables us to minimize disruption, maximize stability and be particularly effective through ownership transitions and other changes.
Partnership Track Record
Bringing an outside investor into a private company ultimately is about trust and confidence in people. We understand this, and our actions reflect this. At the end of every investment (when we eventually exit), our goal is for the owners and management team to say they made the right decision in partnering with Zabel, that we focused tirelessly on the success of the partnership, and that we delivered on all of our commitments to the company and the team. It is not lost on us that references to partnership philosophy are overused in the investment industry. This is why we encourage you to focus on our track record of effectively working with management teams. We aren’t perfect partners, we just work extraordinarily hard at it by being consistent and reliable and dealing with high integrity.
More Time and Resources Translates to More Successful Partnerships
A fundamental tenet of our investment strategy is to allocate more time to providing resources and support to our management team partners. To us, maintaining an appropriate number of investments means we know our companies better, we make decisions faster, we build stronger relationships with our management teams, and we identify more opportunities to enhance value. As all managers of lower middle market companies know, time is always at a premium; by managing the number of companies we work with, we ensure that we have the time to invest in our partnerships.
We Don't Rely on Financial Gymnastics to Drive Returns
Middle market debt levels often do not work with lower middle market companies. It doesn’t take long for a lower middle market business owner to realize that excessive debt often means sacrificing sound investments for the long-term. At Zabel, we do not rely on financial engineering to drive value creation. We focus on partnerships with management, long-term planning, and sound operational execution to generate our returns. Zabel and its management partners determine the appropriate amount of debt for a business, rather than letting the market dictate how much debt we can source and how little equity we can invest. The Zabel team has never lost a penny of bank debt. In fact, we encourage potential management partners to speak with our lending relationships as a reference.