Capital Southwest Corporation is a business development company specializing in credit and private equity and venture capital investments in middle market companies mezzanine later stage mature late venture emerging growth buyouts recapitalizations and growth capital investments It does not invest in startups publicly traded companies real estate developments project finance opportunities oil and gas exploration businesses troubled companies turnarounds and companies in which significant senior management is departing In lower middle market the firm typically invests in growth financing bolton acquisitions new platform acquisitions refinancing dividend recapitalizations sponsorled buyouts and management buyouts situations The investment structures are Unitranche debt subordinated debt senior debt first and second lien debt and preferred and common equity The firm makes equity coinvestments alongside debt investments up to 20 of total check and only makes noncontrol investments It prefers to invest in Industrial manufacturing and services valueadded distribution healthcare products and services business services specialty chemicals food and beverage techenabled services and SaaS models The firm seeks to invest in energy services and products industrial technologies and specialty chemicals and products Within energy services and products the firm seeks to invest in each segment of the industry including upstream midstream and downstream excluding exploration and production with a focus on differentiated products and services equipment and tool rental consumable products and drilling and completion chemicals Within industrial technologies it seeks to invest in automation and process controls handling and packaging equipment industrial filtration and fluid handling measurement monitoring and testing professional tools and sensors and instrumentation Within and specialty chemicals and products the firm seeks to invest in businesses that develop and manufacture highly differentiated chemicals and products including adhesives coatings and sealants catalysts and absorbents cosmeceuticals fine chemicals flavors and fragrances performance lubricants polymers plastics and composites chemical dispensing and filtration equipment professional and industrial trade consumables and tools engineered solutions for HVAC plumbing and electrical installations specified high performance materials for fire protection and oilfield applications It may also invest in exceptional opportunities in building products The firm seeks to invest in the United States The firm seeks to make investments ranging from 5 to 25 million in securities It seeks to make equity investments ranging from 5 million to 50 million and debt investments between 5 million and 20 million and coinvest in transaction size up to 40 million It prefers to invest in companies with revenues approaching above 10 million profitable operations historical growth rate of at least 15 percent per year Within the lower middle market it seeks to invest in with less than 15 million in EBITDA and also opportunistically invests in the upper middle market generally defined as companies with EBITDA in excess of 50 million In addition to making direct investments the firm allocates capital to syndicated first and second lien term loans in the upper middle market Criteria for Upper Middle Market Syndicated 1st Lien is EBITDA Size more than 30 million Closing Leverage greater than 4 times investment hold size between 5 million and 7 million investment yield greater than 65 Criteria for Upper Middle Market Syndicated 2nd Lien is EBITDA Size more than 50 million Closing Leverage greater than 6 times investment hold size between 5 million and 7 million investment yield greater than 9 It prefers to take a majority and minority stake The firm has the flexibility to hold investments for very long period in its portfolio companies It may also invest through warrants The firm prefers to take Board participation in its portfolio companies Capital Southwest Corporation was founded on April 19 1961 and is based in Dallas Texas