Our Strategy

Sector Focus and Acquisition Criteria

Target Company Revenue  
LBF focuses on acquiring companies, public or private, in the underserved small- to middle-market. We define this market as enterprise software companies having between $1,000,000 and $30,000,000 in revenues. This segment is attractive for four primary reasons:
1)      There is much less competition among perspective acquirers, and those funds that are competitive tend to be less sophisticated in nature;
2)      The current economic environment has created unique challenges for many businesses, and this is especially true for companies of this size that have professional investors who have funds coming to end-of-life and/or the need to cull the weaker companies from their portfolios to focus on other opportunities;
3)      The software industry is reaching a point in its maturity where demographic factors are starting to force founders to deal with transitioning their business to a new generation of leadership and/or seek a liquidity event;
4)      Companies in this segment and of this size can benefit immensely from the General Partners’ expertise and relationships.

Industry Focus
LBF targets businesses in all aspects of the enterprise software sector.

Investments in Going-Concerns    
LBF targets operating private or public businesses, including divisions, subsidiaries or individual operating units of larger companies capable of operating as stand-alone companies. We do not invest in start-ups and pre-revenue businesses.

Target Company Revenue  
Ideal target size is an enterprise software company with a revenue base of $1,000,000 to $30,000,000, with the anticipated average revenue in the $3.0 million to $7.0 million range.

Target Company Profitability
Profitability is not a pre-requisite to be considered as an LBF investment.

Target Company Management
LBF maintains a flexible posture when it comes to company management. We will pursue opportunities where new management will be required, and our extensive experience in software M&A provides us with a ready pool of proven industry executives, including the partners of LBF. We have also reached profitable results in numerous situations by partnering with existing management.

Equity Capital
LBF generally invests in common stock or in securities that are convertible into common stock, including preferred stock securities. We also make secured loans to target companies in connection with obtaining a control position and we will also extend Debtor-In-Possession (DIP) financing.

LBF prefers to be a control investor in our companies, either through the acquisition of a majority of common stock or through board representation.

LBF will create and sponsor a plan of reorganization for a debtor-in-possession and/or a businesses operating in bankruptcy or in default of obligations to creditors.

LBF will acquire businesses globally with the caveat that they relocate a majority of their employees to Louisiana within a fixed time frame in order to reap the benefits of the State’s innovative and lucrative tax credits and rebates.

LBF works closely with financial service firms and will pay intermediary and finder fees.


Copyright © Louisiana Buyout Fund
All Rights Reserved.