Transaction type
Red Diamond Capital prefers change-of-control transactions in partnership with management, where the fund is a controlling owner or shares control with like-minded financial sponsors.
We will consider minority investments under certain circumstances, when Red Diamond has a meaningful voice in the strategic oversight of the company and appropriate liquidity and governance rights.
Red Diamond Capital will consider several different types of financial structures for our investments:
- Management buyouts of profitable companies in moderate to high-growth areas with experienced management teams and attractive, recurring revenue-based businesses.
- Recapitalizations involving equity investments in established businesses to provide liquidity for existing shareholders and fund future expansion.
- Leveraged build-ups led by strong management teams who plan to create dominant businesses through the acquisition and consolidation of several “platform” and “add-on” companies within an industry segment.
- Growth equity investments in companies that have achieved critical mass and seek private capital to accelerate growth or acquisitions to become a dominant competitor in their markets.
Transaction size
Red Diamond Capital seeks to invest between $10 million and $35 million of equity in each platform company. In general, Red Diamond seeks to make investments in platform companies with at least $25 million in annual revenues and $5 million in annual EBITDA. We will consider smaller investments to fund add-on acquisitions to existing portfolio companies. We can significantly expand the size of our investment commitments when necessary by partnering with other private equity funds or through direct investment by our affiliate, Mitsubishi Corporation.
Company location
Red Diamond invests in companies headquartered in the United States and Canada. The fund has a strong interest in companies with international operations, but the companies must have a significant operating presence in North America.
