Calgary, Canada, July 29, 2013 --(PR.com
)-- Market data show that the trailing valuations of Canadian SMEs have tended to be reduced by severe 2008 crisis numbers leading to an improved market for private equity buyers like Equicapita over medium term.
Greg Tooth, one of the three co-founders of Equicapita reports "Equicapita believes that SME (small medium enterprise) private equity investors are heading into a very compelling decade for returns as the opportunities to acquire competitively priced SMEs will be significant. Additionally, current trailing cash flow valuations are artificially low, incorporating weak 2008-10 operating results post credit crisis adding another source of potential out performance for current investors in this asset class. Sales and EBITDA numbers were frequently severely depressed following the 2008 crisis and while now the underlying businesses have recovered from what we see in deal flow, achieved transaction multiples are still being effected in a material number of cases."
Equicapita is a Calgary-based nano-gap private equity fund focusing on acquiring Canadian SMEs that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita generally seeks to acquire businesses: at what it believes are reasonable prices; with a demonstrated history of free cash flow greater than $1 million per annum; with a durable competitive advantage; that operate in industries that Equicapita believes have sound long-term macro prospects; with ongoing participation of senior personnel; with the ability to maintain the cash flow without disproportionate amounts of new capital; where Equicapita can partner with management and align their interest with Equicapita through tools such as earn-outs, vendor take backs and management incentive plans; to be held for the long term; where there is some potential to grow sustainable free cash flow, but where that growth is not essential to generate suitable returns.
This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate," "expect," "may," "should" "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward looking information. Those forward-looking statements herein made by Equicapita, if any, reflect Equicapita's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those anticipated or predicted in these forward-looking statements, and the differences may be material. Factors which could cause actual results or events to differ materially from current expectations include, among other things: risks associated with the ownership and operation of businesses, including fluctuations in interest rates; general economic conditions; supply and demand for businesses; competition for available businesses; changes in legislation and the regulatory environment; and international trade and global political conditions. Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release (if any), which is given as of the date it is expressed herein. Equicapita undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.