Zev Holdings targets control equity investments in small industrial businesses located in southeast Michigan that generate attractive and sustainable free cash flows. Zev seeks to build on what the owner has accomplished by investing fresh resources into the sales and operations of the business over the long term.

Investment Philosophy

Acquire

  • Identify mature businesses that can fund operations, capital structure and initiatives at close while providing an avenue to invest financial and strategic resources to increase cash flows

  • Utilize balanced capital structure that combines sufficient equity, appropriate leverage and reasonable seller debt to align incentives and ensure long-term stability

  • Hold sufficient equity capital to close attractive opportunities with speed and confidence on short notice

Operate

  • Fortify the existing strengths and key success factors that have led to historic success while also enhancing the business through implementation of Zev operating philosophy and structure

  • Pursue improvement opportunities through execution of short-, medium- and long-term strategy

  • Strengthen the balance sheet by reducing debt, improving liquidity and optimizing working capital to minimize risk and position the company for continued growth

  • Prioritize growing cash flows of the business and re-investing earnings at an attractive rate

Return Capital

  • Allocate capital to initiatives that generate the highest value, fuel growth and create long-term shareholder wealth

  • Grow company such that a proportion of free cash flows can be allocated to attractive shareholder returns while allowing continued meaningful investment in the business

  • Provide reasonable opportunities for investors to benefit from liquidity events that satisfy return targets (e.g. Sale, buy-back, refinance, etc.)

Investment Criteria

Transaction Types

  • Owner transition/retirement

  • Management buy-out

  • Undercapitalized business

Industry Focus

  • Manufacturing

  • Industrials

  • Distribution

Business Attributes

  • Southeast Michigan

  • Enterprise value $1-$5 million

  • Mature Business

  • Workforce Continuity

Target Profile

  • Ownership transition – Zev is committed to a transparent diligence process emphasizing speed and confidence to close. We want to work with motivated parties who are similarly prepared and committed to a transaction that will continue the company legacy under new ownership.

  • Mature businesses – Proven resilience over an extended period of time in the competitive market environment is a key factor in our evaluation process.

  • Sustainable organizational structure with stable employee base – Continuity of the organizational structure and employee base post-close is a critical component of our process. We view employees as partners in the business and treat them accordingly. Our goal is to add needed positions to fuel growth vs. replacing existing capabilities.

  • Low customer churn – Deeply entrenched customer relationships provide additional confidence that revenues are stable and the value proposition is well-regarded by customers. This tangible evidence helps us move efficiently through diligence.

  • Attractive gross margins – Strong gross margins are another tangible indicator that the offering provided by the company is valued by the market and commands a premium price relative to the cost structure. This further demonstrates that the company has a sustainable competitive advantage.

  • Untapped growth opportunities – Undercapitalized opportunities where we can deploy resources at attractive rates of return is our preferred approach. An attractive opportunity is one where we can build on the existing business in perpetuity.