CSWC Profile
Capital Southwest Corporation, based in Dallas, Texas, operates as a diversified business development company specializing in credit, private equity, and venture capital investments. Founded in 1961, the firm focuses on middle market companies, targeting investments in mezzanine, later stage, mature, late venture, and emerging growth stages. It avoids investments in startups, publicly traded companies, real estate developments, and troubled firms undergoing turnarounds, preferring stable companies with solid management teams.
Within the lower middle market, Capital Southwest Corporation primarily invests in growth financing, bolt-on acquisitions, new platform acquisitions, refinancing, dividend recapitalizations, sponsor-led buyouts, and management buyouts. The firm employs various investment structures such as Unitranche debt, subordinated debt, senior debt, first and second lien debt, and preferred and common equity. It also engages in equity co-investments alongside debt investments, typically up to 20% of the total investment.
The firm's sector focus includes industrial manufacturing and services, value-added distribution, healthcare products and services, business services, specialty chemicals, food and beverage, tech-enabled services, and SaaS models. It also seeks opportunities in energy services and products, industrial technologies, and specialty chemicals and products, excluding exploration and production activities.
Capital Southwest Corporation invests exclusively in the United States, targeting companies with revenues typically exceeding $10 million and historical growth rates of at least 15% annually. The firm's investment range varies from $5 million to $25 million in securities, with equity investments ranging from $5 million to $50 million and debt investments between $5 million and $20 million. It considers both majority and minority stakes and actively participates on the boards of its portfolio companies, demonstrating a commitment to long-term partnership and value creation.
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