Investment Strategy

LDI builds long-lasting value-added distribution businesses by providing effective management teams with the tools they need to succeed.  We acquire at least a majority position in a smaller, middle-market distributor with some unrealized growth opportunities and then make additional investments, for example,  in strategy, human capital and systems, in order to increase market share.  We help our management teams complement solid organic growth with long term strategic initiatives  including selective acquisitions that make sense.  Our long-term time horizon and incentive structures encourage our teams to produce sustainable value engines. 

Acquisition Criteria for New Investments

• Wholesale distribution business - an industry leader in a niche market
• Lower middle market
  • Target revenue: $10 to $50 million (with bias toward upper end of range)
  • Target EBITDA: $2 to $6 million (with bias toward upper end of range)
  • May go higher in select cases
• Differentiated products and services, diversified product portfolio and value-added services – in other words, a defensible market position
• Proven management team or at least a few solid, experienced managers capable of building a more complete team (core institutional knowledge exists and will stay)
• Three years of positive cash flow
• Historical organic growth equal to or better than industry growth rates
• Diversified base of customers and suppliers
• National or international markets
• Headquartered in U.S.

Additional preferences:

• Information systems that will support growth without significant re-engineering.
• Strong in-house training programs.
• Midwest headquarters

We are unlikely to find interest in:

• Start-ups
• Retailers
• Heavy manufacturers
• Pure technology companies
• Real estate development
• Commodity-based or natural resource firms
• Market-driven turnarounds
• Companies with negative cash flow
• Companies with unproven leadership