Transition Capital Partners

A Texas private equity group that has been investing since 1993, Transition Capital Partners, or TCP, is based in Southlake and concentrates on smaller companies. It says it has completed dozens of acquisitions, more than twenty of them in Texas, and that it makes only one or two new investments a year so that its small team can give each management partner the time they expect.

Investing without a fund clock

The firm's main point of difference is the structure of its capital. It says it works with management teams to build value that lasts, without the exit pressure that fund-raising cycles put on conventional private equity funds. Because it is not bound by many of the restrictions that limit those funds, TCP says it can offer management partners flexible solutions, and it describes its culture as inflexible about being flexible: it tailors its playbook to the partner's own.

What it looks for

TCP's interest is in the lower middle market, and the firm says it has spent over twenty-five years doing the same thing: partnering with management teams to create value in businesses of that size. It buys established companies as platform investments and also backs software-as-a-service businesses on the strength of recurring revenue, without requiring them to be profitable. It pays for bolt-on purchases by businesses it already owns, and sets no minimum size for them, and it handles recapitalizations, management buyouts and corporate divestitures. The firm is open to many industry sectors in Texas and neighbouring states.

Why small companies

The firm gives two reasons for its focus. First, it believes smaller businesses offer significant room for growth once the people side is right. Second, a small company allows TCP to contribute more as a partner through its business-building experience and network of relationships.

A varied portfolio

Companies it has backed include a Texas maker of conduit for utilities and telecommunications, an education software provider, a third-party logistics firm, an HVAC components maker and a hospitality staffing business. The site also offers investors a login portal.

Transition Capital Partners, also known as TCP, is a private equity group based in Southlake, Texas, that has been investing since 1993. It takes stakes in smaller businesses and works alongside their management teams over the long term, free of the fundraising cycles that set exit timelines for conventional funds.

Products and services

• Platform acquisitions: buys established lower middle-market companies that meet its profit criteria.
• SaaS company investment: backs software businesses on the strength of recurring revenue, with no profit minimum.
• Add-on acquisitions: funds bolt-on purchases for companies already in its portfolio, with no minimum size.
• Recapitalisations and buy-outs: handles recapitalisations, management buy-outs and corporate divestitures.

Who it serves

TCP looks for companies across many industry sectors in Texas and the neighbouring states, partnering directly with the teams who run them. Chief executives of a software firm, a pipe business and a marketing platform company are quoted on its site.

Key facts

• Based in: Southlake, Texas
• Founded: 1993
• Track record: more than 45 acquisitions completed