Altacrest Capital – A Dallas based private investment firm

Investing in Brands and Growth

Consumer Brands. eCommerce. Sustainable Growth Businesses

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Who We Are

Altacrest Capital is a private equity firm that invests in asset light, profitable / cash flowing, and sustainable growth businesses.
Experienced. Invested and advised on over 100 transactions worth over $3 billion. We’ve been focused on Consumer Brand, Retail, and related growth businesses since 1999.
Industry expertise. Significant industry expertise in consumer brands, and a deep understanding of eCommerce channels
Focused. We look for growth businesses across the consumer value chain, or growth businesses that have characteristics and growth opportunities analogous to what we see in consumer brands
Based in Dallas, Texas but we seek out great businesses throughout the U.S.

Values

What we practice and seek out in our partners

Open and Honest. We value your time, and we provide honest feedback quickly, whether we’re negotiating a transaction or working together as partners.
Culture matters. Any true brand that has a relationship with its core customer values and practices strong culture.
We align. We spend a great deal of time and energy confirming we are aligned with our partners on vision. Then, we create transaction structures that confirm alignment.
We measure. What’s measured gets done.
Ego Free. We’re here to succeed together, not seek credit.

Approach

Growth. We generate investment return by executing core growth opportunities, not by financial engineering.
Strong, conservative balance sheet. Growth businesses need balance sheet flexibility. We don’t take on excessive debt. We value liquidity available for core, profitable revenue growth.
Long term value creation. We want to maximize cash on cash returns (as opposed to IRR), while being pragmatic about capitalizing on market opportunities. Flexible time horizon (target timeline approx. 3 – 7 years)
Focus. We seek to do one deal each year or every other year. Partners work hand in hand with management.
Operational value add. We provide outside expertise and resources to management teams without meddling. We are happy to provide you with specific examples.

Investment Criteria

Financial Benchmarks: Minimum EBITDA of $5 million. For consumer brand businesses, we prefer revenue to be greater than $25 million. (For non-consumer businesses, there can be more flexibility, especially on the revenue metric)
Visible and Achievable Growth Opportunities. We want to more than double EBITDA through visible, identifiable, core revenue growth opportunities.
Important Company and Deal Dynamics:
- Prefer founder-owned / no institutional ownership.
- Management team depth is strong beyond the founder / primary owner.
- Current owners will maintain a meaningful ownership stake alongside Altacrest.
Alignment of vision for business’s long term value creation. We seek partners that value our approach. We spend time to confirm this early in our discussions. We always row in the same direction, together, to achieve success.

Criteria Specific to Consumer Brands

Healthy product margins (price minus COG, shipping > 70%)
Evidence of a sustainable brand, not just a product (repeat purchase rates, loyalty club membership, healthy subscription revenue, substantive email marketing list, etc.)
We prefer small / no Amazon exposure. Website and specialty retail are preferred channels.
Inventory management: SKU count, turns, discipline are critical for the only capital in the business.
Attractive ad spend metrics and discipline.
Strategic importance in industry niche. Defensible

Other industries of interest:

Personal care / beauty
B2B eCommerce
Warranty companies, software companies and other service businesses that are key vendors to brands and / or the consumer value chain
Shelf stable foods (ingredients, spices, etc.)
For profit (non-501c) associations

How We Partner

We strive to make decisions collaboratively with all key stakeholders: inclusive of the brand’s customers, founders, and management team members

Before beginning a new partnership, it is imperative that Altacrest and the founder have a clear understanding of the founder’s (or incumbent management team’s) desired role going forward. We welcome situations where the founder wants to remain the primary driver of the business and maintain ultimate responsibility for growing the company. In other instances, the founder prefers that a new management team is brought in to drive future growth. We are also comfortable with that approach. As we are usually the first outside investors in a company, we partner with founders and management teams to navigate the preferred transition carefully.

Whether we are working with the founder or a newly recruited CEO, we look to leverage the benefits of the Altacrest Ecosystem. We utilize a hands-on approach. Beyond capital, we provide real world experience building brands. We collaborate with founders and management teams to grow the business together, be it through enhanced omnichannel digital marketing (eg, Amazon, Shopify, Google Ads, other dot coms, etc.), improved back end systems, channel expansion, or product development or line extensions, including reliable management connections in Asia. We help our portfolio companies achieve their full potential by leveraging relationships, building teams, and implementing best practices in these areas.

Our primary job is to create an operating and financial environment for management to freely pursue intelligent opportunities that will benefit our companies in the long run. We are not driven by short term decisions, instead focusing on building sustainable value.

Altacrest