Gen Cap America
TOP 50 PE Winner
2022
Firm Inception: 1988
Number of Active Portfolio Investments: 20
Number of Realized Investments: 39
Investment Range: TEV - $9-$90 Million
Current Fund: Fund VII
Current Fund Size: $250M
Transactions completed since October 2020, including acquisitions, add-ons, and divestments:
Gen Cap America SOLD L.W. Allen, Inc. L.W. Allen to SJE, Inc. (“SJE”), a portfolio company of Audax Group.
Gen Cap America ACQUIRED Frontier Packaging, Inc. in partnership with management.
Gen Cap America ACQUIRED Lab Products, LLC and Harford Systems, LLC from Avidity Science, LLC.
Gen Cap America ACQUIRED Aquasol Corporation in partnership with management.
Gen Cap America ACQUIRED Lab Products, LCC in partnership with management.
Leadership:
Barney Byrd, President and CEO
Don Napier, Executive Vice President
Chris Godwin, Managing Director
Matt Lane, Managing Director
Mark Isaacs, Managing Director
Andrew Ginsberg, Director
Lamar Stanley, Director
Team Members: 15
Primary Address: 40 Burton Hills Blvd, Suite 420, Nashville, TN 37215
Website: www.gencapamerica.com
Phone Number: 615 256 0231
Which best describes the firm?: Traditional | LP Funded
Industry focus: Manufacturing, Distribution, and Basic Services.
Attributes: Firm History, Deal Volume, Unique Firm Strategy, Portfolio Excellence, Performance
While many firms advertise the development of new or different techniques or strategies for operating in our industry, what makes Gen Cap an exceptional firm is our commitment to and consistent execution of our proven strategy that has stood the test of time. Since it’s beginning in 1988 all the way to today in Fund VII, Gen Cap has had the same focus - investing in lower middle market companies in basic industries with track records of stability. That’s it. Typically firms with a track record comparable to Gen Cap’s (two top quartile funds preceding this fund - Fund VII) would have moved up market by now; however, even 30 years later we remain committed to serving as transition capital in the lower middle market. That is where we continue to feel there is the most opportunity, but we also believe it is prudent to stick to what has made us successful.
Overview
Founded in 1988, Gen Cap America (GCA) is a private equity firm headquartered in Nashville, Tennessee. GCA specializes in acquisitions and recapitalizations of quality middle-market and lower-middle-market businesses ($2M-$10M of EBITDA). GCA has 20 portfolio companies, and is actively investing Fund VII, a $250M fund which began making investments in 2016.
Gen Cap has an extraordinary range of experiences in our ranks, in spite of having a relatively lean team. From the more conventional backgrounds in accounting, venture investing, merchant banking and investment banking to more “non-traditional” backgrounds in the department of defense, Gen Cap has a broad mix of exposures that assist us in utilizing our varying networks to quickly familiarize ourselves with industries where we might not already be familiar through 30 years and 60+ investments. Within our halls, you will find members who have spent significant parts of their careers leading deal teams, lending teams, manufacturing companies, or troops in the military. This diversity in such a lean team allows for a lot of varying perspectives enjoyed in a small and agile investment committee.
Gen Cap is one of only a handful of firms who started in the lower middle market and stayed there. We haven’t raised significantly larger funds, changed our deal sizes, or meaningfully altered our value proposition to LP’s. Put simply, we have stuck to what has worked and continues to work. For this reason, we are one of a relatively small number of firms who have decades of experience sourcing, executing and exiting investments in companies in the lower middle market. Our long track record in this part of the market speaks to our influence in the market. Because we have demonstrated success in the market, other firms have imitated our activities. Particularly, around deal sourcing. We were early adopters of the aggressive business development function and have always valued the critical role this plays in the success of a firm. In addition to the business development role, we have always emphasized the importance of every member of our team spending time on the road and maintaining relationships with intermediaries.
It is not uncommon for firms to gain special recognition for newly developed strategies or innovative perspectives into developing markets, but what makes Gen Cap truly unique is our commitment and dogged persistence in our proven model. During a year when all firms (including ours) have seen record deal flow and increasing multiples, we have remained disciplined and have “stuck to our knitting”. This is our “20 mile march” (as Jim Collins puts it). No matter the market conditions, our strike zone remains fixed. And while we, like all successful firms, have been enticed to move up market, we remain focused on our corner of the market where we feel we can be most successful. We often describe ourselves as a lower mid-market version of Berkshire Hathaway, finding great transition opportunities, preserving value, and always remaining committed to the values that have made us successful.
Why do prospects want to do business with the firm?
Business owners love working with Gen Cap most notably because we do what we say we’re going to do. In a market where the occurrences of re-trading, altering management, and changing strategies seem to be growing, we’ve found that owners (and investment bankers) are appreciative of our “straight shooting” style. We back existing management teams, stick with them, and stay out of their way - just like we said we would during the first management meeting.
Why do intermediaries present opportunities and want to conduct transactions with the firm?
Gen Cap has built an industry wide reputation of doing what we say we’re going to do. Intermediaries appreciate our commitment to providing quick and candid feedback on deal opportunities whether a deal is a potential fit or not. Our firm provides a quick pass or thoughtful questions because we respect others’ time. On deal execution, intermediaries know that any IOI or LOI we submit is backed up by considerable diligence and the valuation we present is where we intend to close. Lastly, intermediaries like to work with us because we are firm believers in doing multiple transactions over time with the same bankers. Our relationships with intermediaries in some cases extend back decades and we hope to maintain them for decades to come.
Contact Gen Cap America
HQ
40 Burton Hills Blvd
Suite 420
Nashville, TN 37215
Call 615.256.0231 → | Visit gencapamerica.com →