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Arch Equity Partners was formed in 2008 as a private equity firm that concentrates on investments for companies in the lower middle market. Arch was created to bring the professional discipline of a larger private equity firm to the lower middle market, in particular, in companies with revenue between $3-15 million and EBITDA above $500,000. We will invest up to $2 million in any opportunity but our average is closer to $1 million. While most investment firms seek a horizon of 5-10 years, we believe a good investment is worth keeping and so target a hold period of 12-15 years. Finally, we actively partner with management teams to ensure they have a meaningful ownership position, targeting management team ownership of 15-25%.

While the majority of the opportunities we evaluate are in the manufacturing, distribution and business services markets, we also have an interest in looking at retail-based companies, contractors, healthcare, and other firms representing a wide variety of markets and disciplines. Arch does not invest in real estate ownership companies or higher-order technology companies.

From our initial investments, we have been building value in partnership with the management teams of our portfolio companies through operational improvements, professional management practices, and targeted and sustainable business growth. Our mission is to partner with strong management teams to build better businesses over a longer investment horizon by unlocking the stored potential of each company.

We invite you to read more about the Arch partners, our team-based continuous improvement program, unique investment structures, and highly efficient closing process by clicking on The Arch Difference.


Here is what separates Arch as a uniquely designed private equity firm:

Concentration on the Lower Middle Market

  • The experience of both Arch’s partners and investors comes from this segment - we understand the dynamics of this segment and are most attracted to it personally
  • The best small businesses have a clear “reason for being” that are the engines of value
  • Small businesses are centers of innovation and excellence with great potential waiting to be realized
  • This segment has strong potential for investments due to the number of business in it
  • Acquisition dynamics are more attractive relative to larger companies

Longer Term Horizon for Investments

  • We value investments based on compounded returns, not annualized returns
  • Once we find a great investment there is no compelling reason to let it go - don’t have to do deals or harvest returns because not a fund
  • Small companies often require patience in implementing change and improving operations processes
  • Eliminates need to force growth outside of what is reasonable

Managers Become Owner Alongside Arch

  • We believe in the concept of managers as owners and not just for a token amount of ownership (target 15-25%)
  • They write checks for equity the same way Arch does so one class of ownership with the same price
  • Aligns ownership, management and marketplace dynamics so no negative competition

Arch’s Investment Process is Exceptionally Efficient

  • We provide a very quick indication of interest to know if deal makes sense for everyone
  • Won’t do a deal unless completely certain it can be fully financed; willing to invest more equity as bridge to close
  • We know what works for our investors and don’t waste time pushing structures that Seller will not accept
  • Target closing in 90 days or less to retain goodwill from Seller and keep expenses low


Read About The Arch Difference
 

 
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