ACQUISITION CRITERIA

Acquisition Criteria Middle Market

We work with active acquirers seeking established businesses across select industries. Current areas of interest include the following:

Software, SaaS, AI, and Technology-Enabled Businesses

Acquirers are actively seeking software, SaaS, AI-enabled, and technology-enabled businesses with strong recurring revenue, durable customer relationships, and scalable growth opportunities.

  • Target sectors: Vertical market software, SaaS, software infrastructure, AI-enabled software, B2B software, technology-enabled services, professional services, and businesses that can benefit from stronger technology or software expertise.
  • Revenue profile: Typically $1.5M+ for software opportunities, with some buyers seeking $2.5M+ in recurring revenue or $4M–$20M+ in total revenue depending on the mandate.
  • EBITDA / cash flow: Generally $500K+ EBITDA, with many buyers focused on $1M–$5M+ EBITDA or $2M+ annual cash flow.
  • Recurring revenue: Strong preference for recurring or reoccurring revenue, including 50%+ recurring revenue for B2B software and services businesses.
  • Growth and customer base: Preference for businesses growing 10%–15%+ annually, with at least 25 customers and limited customer concentration.
  • Deal size / valuation: Acquisition values may range up to $30M, with some mandates targeting $20M–$60M enterprise value. Software transactions may fall in the 3x–5x ARR range, while service businesses may be evaluated around 4x–7x EBITDA.
  • Ownership / transition: Buyers may pursue majority buyouts and prefer situations where ownership is open to a transition, including stepping back from the CEO role.

Cybersecurity, Defense, Government, and Critical Infrastructure

Acquisition interest includes cybersecurity, defense, government services, and critical infrastructure businesses with recurring revenue, specialized capabilities, and resilient demand.

  • Target sectors: Aerospace and defense, cybersecurity, DoD-focused businesses, specialized government and defense services, managed security service providers, OT/ICS security, digital forensics, threat detection, DFIR, mission-critical communications, smart buildings, structured cabling, and systems integration.
  • Revenue profile: Revenue ranges commonly span $2M–$20M+, depending on buyer and sector fit.
  • EBITDA / cash flow: Buyers generally seek $1M–$3M EBITDA, with some mandates considering $1M–$5M+ EBITDA or $2M+ annual cash flow.
  • Recurring revenue: Strong preference for 70%+ recurring or reoccurring revenue where applicable.
  • Business quality: Preference for companies with at least three years of profitability, low customer concentration, durable services, high barriers to entry, low cyclicality, low capex requirements, and growth opportunities within fragmented markets.
  • Customer concentration: Buyers are cautious of high customer concentration and may avoid opportunities where a single customer represents more than 15% of revenue or where top customers create outsized risk.

Business Services, Professional Services, Industrials, and Real Estate-Related Businesses

Opportunities of interest include stable business services, professional services, industrial, manufacturing, real estate-related, and franchise businesses with strong operating history and growth potential.

  • Target sectors: Tech-enabled business services, professional services, niche manufacturing, industrials, specialized software, business services, and real estate-related businesses.
  • EBITDA profile: Preference for $500K–$5M EBITDA, with a stronger focus around $1M–$2M EBITDA for certain mandates.
  • Deal size: Acquisition values may be up to $30M, depending on financial profile and strategic fit.
  • Business characteristics: Preference for stable companies with 10+ years of operating history, remote or partially remote leadership potential, and opportunities to improve technology capabilities or operational systems.
  • Situations: Attractive situations include founder or family succession, investor exits, recapitalizations, and growth capital needs.
  • Franchisors: Industry-agnostic franchisors with 10+ locations; corporate-owned and franchisee-operated mix is acceptable.
  • Criteria: $20M–$60M enterprise value, preferably below 10x cash flow; brand ownership, royalty collection, and limited company-owned unit requirements preferred.
  • Franchisees: May be considered with approximately $2M+ EBITDA.

Software / Hardware Integrators in the Dallas–Fort Worth Region

There is focused acquisition interest in software and hardware integrators located within approximately 150 miles of Dallas / Fort Worth.

  • Target sector: Software or hardware integrators.
  • Geography: Located within approximately 150 miles of Dallas / Fort Worth.
  • Revenue: $1M+.
  • Cash flow: $500K–$2.5M.
  • Price range: Approximately $10M–$15M.

Geography and Operating History Preferences

  • North America: Several buyers prefer U.S.-headquartered companies with U.S. or Canadian operations, and some require 50%+ North American revenue.
  • Northeast and major metros: Certain infrastructure and cybersecurity-focused buyers prioritize the Northeast corridor and large metro areas, while remaining open to other cities.
  • Dallas / Fort Worth: Some acquisition interest is focused on businesses within approximately 150 miles of Dallas / Fort Worth.
  • Operating history: Preferences range from at least five years in operation to stable businesses with 10+ years of history.
  • Financial diligence: Some buyers request four years of financial statements, balance sheets, and recent trailing twelve-month results.

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