Investment Strategy

Fidelitas Capital seeks to generate superior investment returns by building enterprises of enduring value. We focus on investing in established companies in the lower middle market, where many companies’ potential remains underdeveloped for lack of necessary capital resources, management depth or infrastructure. Often, our best investment opportunities arise from the growth, capital structure or ownership transition challenges facing our potential management/ownership partners.

We primarily seek transaction opportunities in which Fidelitas Capital and its investor relationships would jointly acquire majority control of the business, such as the following:

• Buyouts – providing equity capital to back management teams in acquiring privately-held companies or non-core divisions of larger companies having significant growth potential
• Recapitalizations – providing significant liquidity to a business owner who desires to maintain a meaningful ownership interest in the business, or facilitating the transfer of a business from one generation to the next
• Buy-and-Builds – executing acquisition-driven growth strategies in partnership with a legacy ownership team or management partner in industries where operational scale and increased competitive advantage can be achieved through a series of strategic acquisitions

However, we will consider, on a case-by-case basis, minority recapitalizations of established businesses with proven products or services and demonstrated market opportunities.

With Fidelitas Capital, our management teams benefit from an experienced, board-level resource able to provide critical perspective, and perhaps even to roll up its sleeves, to assist with the strategic, operational infrastructure and capital resource aspects of executing an aggressive value creation strategy.

Investment Criteria

PRIMARY INDUSTRIES OF INTEREST	Manufacturing Value-Added Distribution Industrial Services Business Services Communications Infrastructure Services Aerospace
COMPANY SIZE	Historical revenues of at least $10 million Minimum EBITDA of $2 million
COMPANY CHARACTERISTICS	Established businesses with predictable cash flow Sustainable competitive advantage in markets with compelling growth opportunities Opportunity to drive significant value creation through revenue growth, margin improvement, or strategic transformation through add-on acquisitions
GEOGRAPHY	Primarily focused on companies headquartered in Texas and surrounding states Opportunities nationwide as part of a focused industry strategy in collaboration with a management partner
MANAGEMENT	Proven management teams with meaningful equity ownership

We do not consider investment opportunities in oil & gas minerals, real estate, retail, entertainment, start-up or early-stage companies, companies with significant risk of technological obsolescence, or medical devices or pharmaceuticals yet to receive FDA approval.