Question 1

Who is Addison Clark Group?

Accepted Answer

We are a principal-led private acquisition firm with a family office mindset and independent sponsor flexibility. We acquire established, cash-flowing small businesses — typically one per year — using a flexible capital stack that may include personal capital, seller financing, and senior debt. We operate with long-term ownership intent, focusing on stability, profitability, and operational excellence — not exits on a fixed timeline.

Question 2

What do you buy and at what size?

Accepted Answer

Established, profitable businesses in home services, construction, and business services; typical $1M–$5M purchase price. We avoid food, restaurants, and brick-and-mortar retail.

Question 3

Do you buy turnarounds or only profitable companies?

Accepted Answer

We do not buy standalone turnarounds. We may consider a turnaround as a tuck-in for an existing portfolio company in the same industry where integration can create a larger, profitable platform.

Question 4

Where do you invest?

Accepted Answer

Primarily U.S. companies in stable, growing markets.

Question 5

How do you think about valuation and price multiples?

Accepted Answer

We target 2.5x to 4.0x of normalized EBITDA, SDE, or free cash flow for the purchase price. Metric selection depends on the business: SDE for owner-operated companies, EBITDA for professionally managed teams, FCF when capex or working capital needs are material. Companies that are absentee-owner ready with strong systems and leadership merit the higher end of the range and can justify premiums.

Typical adjustments before applying a multiple include normalization for owner add-backs and one-time items, a quality-of-earnings view, and the working capital delivered at close. Range placement is driven by factors such as customer concentration, growth durability, margin quality, capex intensity, and the cleanliness of the books.

Illustration: if normalized EBITDA is $1.0M and the appropriate multiple is 3.25x, the indicated enterprise value is about $3.25M, subject to working capital and final terms.

Question 6

How are deals structured and financed?

Accepted Answer

Usually SBA 7(a) senior debt plus equity; a seller note may be used where appropriate. Terms are tailored to the business and transition plan.

Question 7

Is real estate included or handled separately?

Accepted Answer

We are open to either purchasing the operating real estate with the business or leasing it from the seller's property entity or a third party. The decision depends on the business model, lender requirements, appraisal/environmental findings, and after-tax considerations. For leases, we prefer market-rate NNN terms aligned with the loan term and renewal options.

Question 8

Do you prefer asset purchases or stock purchases?

Accepted Answer

We prefer asset purchases. Common reasons: clearer separation from legacy liabilities, flexibility to leave behind non-core assets and obligations, and a tax basis step-up that supports depreciation and amortization of acquired assets. In some cases (licenses, contracts, or seller tax considerations), a stock purchase can be better — we will discuss options with you and your advisors.

Question 9

What information do you need to evaluate my business?

Accepted Answer

- Three years financials + YTD: monthly P&L, balance sheet, and cash flow.
- Three years tax returns: complete federal returns with schedules.
- Customer mix & top 10: revenue by customer (3 years + TTM), % of total, contracts and tenure.
- AR/AP aging, payroll summary, key vendor list: 30/60/90 aging, payroll roll-up, and top vendors with annual spend.
- Org chart & key contracts: employment and major customer/supplier agreements, leases, and licenses.
- Add-backs & one-time items: schedule with dates, amounts, and rationale.
- Backlog (if applicable): by customer/project with timing and gross margin.

Question 10

What happens to my employees?

Accepted Answer

We retain teams and invest in tools, training, and practical technology to support them.

Question 11

What does the owner's transition look like?

Accepted Answer

Flexible. From a clean exit with a short handoff to a defined advisory period — case-by-case. Our priority is a smooth transition for employees and customers.

Question 12

How quickly can you close?

Accepted Answer

Timelines vary by deal and lender. We run a focused, document-ready diligence process to move efficiently.

Question 13

What is the typical timeline from signed terms to close?

Accepted Answer

Typical 60–90 days; practical range 45–120 days. Final timing depends on lender processes, third-party items (e.g., appraisals), and responsiveness on both sides. We keep you updated weekly.

Question 14

How long do you hold companies?

Accepted Answer

We default to long-term ownership, focusing on durable cash flow and steady operational improvements rather than quick flips. Opportunistic exits when they maximize after-tax outcomes.

Question 15

How do you handle seller notes and working capital?

Accepted Answer

We use seller notes where they help bridge value and align interests, structured on market, lender-compliant terms (no rigid template). Working capital is set to a normalized "peg" based on historical seasonality (typically a T12 or appropriate seasonal average) with a customary true-up at closing and standard post-close adjustments.

Question 16

Are you buyers or co-brokers?

Accepted Answer

We are principal buyers, not co-brokers or intermediaries.

Question 17

How do you work with sell-side advisors?

Accepted Answer

We respect NDAs and process, provide quick yes/no feedback, share lender-ready materials, and communicate clearly on timelines and diligence requests. We are buyers — not co-brokers — and do not publicly solicit.

Question 18

What is your diligence cadence?

Accepted Answer

Weekly touchpoints with one point of contact and a single, dated checklist. We keep a live tracker in the data room, aim for 24–48-hour turnaround on requests, and escalate issues the same week. Financing runs in parallel to compress time; actual duration depends on data readiness and third-party items.

Question 19

What kinds of businesses do you buy?

Accepted Answer

Established, profitable companies in home services, construction, business services, industrial services, infrastructure services, and specialty manufacturing. We avoid food, restaurants, and brick-and-mortar retail.

Question 20

What size deals do you target?

Accepted Answer

$1M–$5M purchase price. We will look slightly outside that range for the right fit.

Question 21

How are acquisitions structured?

Accepted Answer

Direct co-ownership of the operating company. ACG typically arranges senior financing (e.g., SBA 7(a)) and coordinates closing; partners contribute equity. There is no pooled fund and no public solicitation. We coordinate the transaction and governance agreements on a deal-by-deal basis.

Question 22

Do you use a fund or publicly solicit investments?

Accepted Answer

No. No pooled funds or public solicitation. Each transaction is a private decision among the parties.

Question 23

How is ownership split between ACG and partners?

Accepted Answer

Ownership corresponds to who funds what at purchase. If a partner contributes 10% of the purchase price in equity and ACG secures 90% in financing, the partner owns 10% and ACG owns 90%. Exact terms are set deal-by-deal and documented at closing.

Question 24

What governance rights do partners receive?

Accepted Answer

By default, partners receive information rights and a board seat or observer role. Specifics are defined deal-by-deal in the governance documents.

Question 25

Do you keep the current management team?

Accepted Answer

Yes. We retain proven management and equip them with operating playbooks, disciplined finance, sales/marketing support, and practical technology. Where there are gaps, we augment management with proven leaders or specialists (interim or permanent).

Question 26

What is your reporting cadence and distribution approach?

Accepted Answer

Quarterly financials and KPIs. Distributions depend on cash flow, lender covenants, and board decisions.

Question 27

What tax reporting will partners receive?

Accepted Answer

We issue K-1s from the operating entity, targeting March 31 each year, subject to CPA timing and any required adjustments.

Question 28

Are these interests liquid?

Accepted Answer

No. Co-ownership interests in private companies are illiquid and long-term.

Question 29

What are the key risks?

Accepted Answer

All private business ownership involves risk, including loss of capital. Leverage can amplify outcomes and may constrain flexibility.

Question 30

Who can partner with ACG?

Accepted Answer

By invitation. We partner with people we know who can evaluate small business acquisitions and are comfortable with long-term co-ownership and quarterly reporting.

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