SSC — Why Now Is An Ideal Time — Dinks Finance
2020 is ending much as it began-with dire economic forecasts related to the trajectory of the COVID-19 pandemic. However, even amid this difficult outlook, there are economic bright spots in certain sub-sectors where companies can withstand or even thrive amid the current uncertainty.
That’s why David Fredston , founder of Sole Source Capital, a private equity firm focused on industrial companies in the lower-middle market, remains confident in his firm’s approach. In fact, in 2020 and looking ahead to 2021, Sole Source Capital has continued to find opportunities to invest in overlooked companies that share a few key characteristics.
Identifying Companies and Sectors That Can Withstand Recession
The team at Sole Source Capital (SSC) typically targets companies in key industrial sub-sectors, like supply chain and logistics, packaging, and food distribution. Companies in these kinds of sectors are resistant to recessions and downturns, while also providing opportunities for rapid operational changes and value creation. SSC’s recent investments in these sectors include companies like Worldwide Produce, Supply Chain Services, Dasco Label, Miles Data Technologies, and Dallas Plastics.
In fact, the end of 2020 and the beginning of 2021 could represent ideal periods for new investment in these kinds of companies. Businesses, especially those that are owned by a founder or family, may be struggling in the face of uncertainty, even as sector fundamentals and operational levers provide more opportunities for value creation, at least for investment firms with the right expertise and tools.
Sole Source Capital Identifies Opportunities Overlooked by Other Firms
This approach-focusing on undervalued companies with the right set of key characteristics-has set Sole Source Capital apart not just in 2020, but ever since the firm was founded by David Fredston in 2016. SSC brings a quantitative, operational approach to the lower-middle market, enabling its team of Origination, M&A, and Operations experts to find businesses that can become exceptional enterprises, no matter the overall economic environment.
Once SSC has identified a fit, the M&A team works to quickly complete forensic due diligence, while also collaborating closely with the Operations team to tee-up fast operational change. The team enables rapid value creation by focusing on the largest operational levers, supported by close, continual engagement with management and the application of analytics, dashboards, and other technologies. With this support, companies can rapidly increase their share of a given market and grow into more dynamic, professionalized businesses.
This approach, originally conceived by David Fredston in 2016, has served SSC well in 2020. As the firm works to complete a second round of funding, Sole Source Capital appears well-positioned to continue applying these core strengths to the overlooked opportunities in 2021 and beyond.
Sole Source Capital & Its Approach
Sole Source Capital is a private equity investment firm focusing on North American industrial companies in the lower-middle market. The firm brings a data-driven, operational approach to these opportunities, from sourcing through M&A and due diligence to enterprise transformation. This strategy enabled SSC to deliver impressive returns and consistent performance with its first investment fund. SSC has built an experienced team of experts with the knowledge and connections to execute its unique approach at the highest level.
