K3 Capital Partners

The core direction of K3 Capital Partners, LLC is to build businesses. We provide an infusion of capital and expertise to help businesses make a quantum jump in revenue and profits. We take an owner’s passion in identifying the opportunities and doing the things that make businesses prosper. This allows current management to benefit in both the short and long term.

We invest in untapped potential.

K3 Capital and its affiliates invest in lower middle market businesses. Founded in 2000, the privately held group has made a series of investments into these areas. K3 has an initial committed capital base of $25 million through the 3 general partners and a small network of limited partners. K3 also has access to significant capital through a network of other prospective limited partners.

K3 believes that significant opportunities exist to acquire and build businesses that are considered in the lower middle market. This space contains the majority of businesses. For this sector, availability of private equity funding is limited and often very costly. K3 seeks to support these businesses in their growth and ownership transitions by providing private equity as well as operational support. The focus in this space allows K3 to find opportunities that larger private equity firms deem too small and high net worth individuals too large. K3 brings a strong operational approach to each business opportunity.

It is through our multi-layered approach that we bring value to the companies we acquire. Working with management we crystallize strategic direction, insure proper resource allocation and find ways to improve operating results.

Our focus is to make controlling investments in lower middle market core industrial manufacturing, service, distribution and/or rental businesses.
EBITDA $1 million to $4 million with stability over recent periods.
Gross margins above 25%.
Annual revenue between $5 and $40 million.
Potential to double revenue and EBITDA over a 3-5 year period.
Defensible niche markets with an annual segment revenue of less than $400 million.
Businesses with a key competitive advantage, market position or with proprietary commercial products and the ability to defend their core competencies and markets.
Midwest locations preferred.
Companies with significant management capability who want to grow and participate in the company’s future success.

Acquire lower middle market companies meeting our investment criteria.
Leverage through financial structure an appropriate debt load but a maximum of 70%.
Provide operational leadership to improve operating results and to optimize return on the operating assets.
Reinvest cash flow in either capital expenditures for growth and operational improvements or debt reduction.
Provide investment capital for growth opportunities, for incremental acquisitions for the platform company or to improve operations.
Increase shareholder value through a strategic and tactical execution of the liquidity process.
Maintain a diverse portfolio of companies in order to reduce risk factors due to sector cycles or economic conditions.

The partners and its advisory board have more than 100 years of primary leadership roles in all functional areas. Our group has completed more than 30 acquisitions ranging from family run businesses to larger corporations and recapitalizations. Our ability to work with the existing ownership and understand their issues is paramount to our ability to close and successfully manage each transaction. Our business experience along with our style to roll up our sleeves allows us to not only assist our operating companies to reach their goals but also to effectively communicate with the functional managers within the company.

MARK KALER
Mr. Kaler has over 25 years as a senior executive and general manager in the building products industry. Known as an innovative team builder with the ability to identify, develop and capture strategic opportunities in order to produce superior results. He has significant expertise and demonstrated competencies in business development, strategic visioning, operations and reengineering and building organizational strength. In 1996, he started American Highway Technology and in the following 6 years, he grew the business to $95 million in revenue with an enterprise value of over $40 million. In 2002 he took over the leadership of Construction Products Group – a $270 million operation transforming it from 4 distinct businesses into one operational unit. He has worked in senior management for 4 different private equity firms and has participated in 2 IPO’s. During the last 10 years, he either led or was a key manager in the acquisition and integration of 14 transactions ranging from $1.5 million to $90 million.

LARRY KATZ
Mr. Katz is Managing Director of Mason Dixon LLC., a financial services and trading group. Over the past 25 years he has built the firm into the a leading brokerage and financial services firm at the Chicago Mercantile Exchange where he has developed relationships with many of the leading investment banks and financial institutions. He also has substantial exposure to debt instruments and risk management.

JIM KELLNER
Mr. Kellner is CEO of Applied Systems a software and services firm for the insurance industry. He has over 25 years of progressive leadership roles within the services industry. Over the last 5 years he has grown Applied Systems at 10% annually while doubling EBITDA. He has lead 2 private equity management buyouts and subsequent recapitalization over the last 3 years. During his leadership he has increased the enterprise value from $100 million to over $500 million. He has significant expertise in project management, sales and marketing and organizational development.

K3 management expertise also provides consulting services to businesses outside its portfolio. Again, the focus is on growth and operating efficiencies through strategic planning, strategic sourcing, and implementing sound sales and marketing strategies.

Our experience in mergers and acquisitions has enabled K3 to provide valuation and sell side assistance, as well as develop innovative financing and financial solutions. K3 is also skilled in business process analysis and redesign to find new opportunities for profitable operation.

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