Acquisition Criteria 

Dear KCI Partners,

At KCI, we are always on the lookout for high-quality businesses with scalable models, driven by passionate and focused operators who embody an owner’s mindset. We approach acquisitions with great selectivity, as our vision is to own and nurture these businesses and efficiently allocate capital. 

Key acquisition criteria:

• Track Record: We seek companies with a proven history of revenues and positive operating earnings, or the potential to achieve positive earnings within KCI's wheelhouse.

• Long-Term Commitment: We are not a private equity firm. Much like Berkshire Hathaway, we buy for keeps, with the intent to own and grow operating companies indefinitely.

• Management in Place: We prioritize businesses with existing management teams that know how to operate.

• ROIC: We want to acquire businesses that have a very high return on invested capital.

• Business Size: Ideal candidates generate revenues between $5 million and $25 million.

• Low Debt:  We prefer to invest in businesses with little to no debt.

Why do current owners sell?

• Family Reasons / Retirement:  Some owners who are passionate but ready to take a step back from operations but don't want to see their life-long work go to some private equity or heartless corporation may prefer to sell their business to KCI and keep their income steady through retirement and invest in KCI shares.  Owners with multiple heirs may choose to sell to KCI because passing their business to family may result in the business dissolving or being run poorly.  

• Tax Purposes:  There are many tax benefits to a corporate structure that are not available to limited partnerships or smaller organizations.

• Great at their individual business, but bad at capital allocation:  Owners may have reached a capacity for growth and value and joining a partnership like KCI, they can take advantages of scale and compounding growth.

• Liquidity / Cash Strapped:  Many smaller companies limit their growth potential due to capital constraints and cost of debt.  Partnering with KCI solves a lot of these issues.

Our due diligence process is very fast, and our terms are clear and transparent. If you are interested in working with us or simply want to learn more, we’d love to hear from you.