Meridian operates as an “Orphan Holding Company” (an “OHC”). Our investment strategy is to be a long-term investor in mature cash flowing American small cap companies.
As a holding company, Meridian seeks to a lead investor in a small portfolio of high-quality undervalued small companies that are no longer of strategic value to their venture capital sponsors.
The companies in which Meridian will invest are generally mature leaders in small niche markets. These companies, while not rapid growers or ideal candidates for initial public offerings (IPOs), are generally profitable and able to generate strong sustainable positive cash flows that we believe can be used to deliver high returns to investors.
Portfolio Company Characteristics
The following are some of the general investment criteria we will look for in Meridian portfolio companies:
• private with annual revenue between $20 million and $200 million;
• recognized as a long-term leader with a strong brand and reputation in the market niche in which it competes;
• gross margins and EBITDA margins should be at least as high as direct peers, and should be stable or rising;
• strong professional management anxious to become participative in Meridian value creation strategy
• solid business fundamentals, generally non-cyclical, capable of producing net cash flow on a consistent basis; and
• little risk of technology or market disintermediation
Meridian will generally seek to take stakes of at least 25% in its new portfolio companies and expects to have the opportunity to participate at the board level.
If you would like to learn more about Meridian and introduce your company to us, please see our contact information here.