• OVERVIEW

    Edgewater Capital Partners, headquartered in Cleveland, Ohio, is a sector focused private equity firm investing in lower, middle-market performance materials businesses. We have extensive experience and expertise in niche manufacturers of specialty chemicals, pharmaceuticals, and engineered substances. Twenty years of industry specific investing has allowed us to develop a deep understanding of the complexities and nuances common to performance materials businesses. As a result, we believe expertise in our target markets enables us to quickly and comprehensively understand a company’s value proposition, customer relationships, and perceived or misunderstood risks. These factors will drive a successful transaction outcome as well as help the target reach its next level of success.

    Experience developed over the last two decades provides us insights that few other sponsors can match. We are strategic, patient capital looking for opportunities to partner with owner-operators and management teams in developing, enhancing, and growing market leading businesses.

Target Industries

Specialty Chemicals

Specialty Chemicals

  • Low volume production and differentiated products with high margins and barriers to entry
  • Purchased for performance requirements 

Pharmaceutical

Pharmaceutical

  • Proprietary formulations with competitive protections (patents, NDAs, exclusivity, etc.)
  • Customer buying decisions based on quality, supply assurance, and regulatory compliance, rather than price
  • Limited replacement options and high switching costs

Engineered Substances

Engineered Substances

  • Essential component, utilized to enhance performance or reliability
  • Small, but critical component often solving a design and/or capability problem
  • Purchased for performance characteristics rather than specific composition
  • Examples include, but are not limited to: composites, ceramics, abrasives, polymers, biomedical materials, nano-elements, resins, plastics, and alloys

Investment Criteria

Geography:

Platform Investments: Headquartered in the United States or Canada.
Add-on Acquisitions: No geographic restrictions.

Investment Types:

No formal restrictions, but we often find success in:

  • Corporate divestitures;
  • Partnering with owner-operators;
  • Supporting succession planning in family businesses; and
  • Management buyouts.

Sector:

Performance materials businesses, with specific vertical focus in:

  • Specialty chemicals;
  • Pharmaceuticals; and
  • Engineered substances / components / products.

Financial:

Platform Investments:

  • Revenues typically between $10 to $100 million;
  • EBITDA greater than $2 million; and
  • Gross margins greater than 20%.

Add-on Acquisitions:

  • Strategic fit with a current portfolio company;
  • Commercially proven technology;
  • History of positive cash flow; and
  • Gross margins greater than 20%.

Investment Philosophy

We invest in opportunities where we can add value above and beyond a mere source of capital. Similar to the products at our portfolio companies, we are often the right partner when the “off-the-shelf” offering underperforms or doesn’t work. We look to build, enrich, and grow our portfolio companies. We strive to understand why customers purchase our company’s products and then thoughtfully add resources to enhance the value proposition. Our companies’ greatest assets are its people; they are the critical ingredient to success. By design, we do not run our portfolio companies. Instead, we look to transform organizations by partnering, empowering, and incentivizing management to achieve excellence.

 

The Edgewater Advantage

With nearly two decades of experience investing in performance materials, Edgewater has developed a deep understanding of the complexities and industry challenges common to our businesses. Edgewater’s team of operating partners brings hands-on operating experience and relevant industry knowledge unmatched by other private equity firms. During the diligence process, this expertise enables Edgewater to more quickly understand a company’s value proposition, highlight risks, and capitalize on opportunities. Moreover, during the ownernship period, our industry connections foster growth through customer relationships, building the team, and identifying add-on investment opportunities.

With precise industry focus, Edgewater brings more to the table than capital. Our nearly 20 years of investing in our core markets provides insight, knowledge, and experience few sponsors match.