Acquisition Criteria

Investment Criteria

EBITDA: $500k – $5.0M
Prefer companies with 10%+ EBITDA margins

Focus on Western U.S.
Strong emphasis on the Pacific Northwest

Non-cyclical industries

Strong cultures focused on building great teams and delivering superior customer service

Management/Senior Leadership:

Generally, we prefer opportunities with continuing management and senior leadership, but we are also happy to consider an investment in which management and manager/owners are transitioned out over a reasonable time period.

Attractive compensation programs and incentive-based options for owners and/or senior managers are an integral part of our investment philosophy.

Preferred Investment Structure:

Skylight strives to keep the structure simple for the Sellers while aligning incentives for the team and management. We do this by utilizing the following elements when structuring investments:

  • Cash payment/investment for the Seller
  • Rollover equity (if desired) for owners/managers seeking to maintain an ongoing ownership stake
  • Seller debt (when 3rd party debt is unavailable or cost prohibitive)

NOTE: We do not use earnouts as they often create tension with the Seller and misalign incentives

Industry Preferences:

We are industry agnostic and this remains one of the least-critical deal evaluation parameters at Skylight. Management and specific business characteristics will always serve as the primary metric for judging potential opportunities.

That said, Skylight does have particular expertise in the residential/home service space:

  • Plumbing
  • HVAC
  • Electrical
  • Roofing
  • Pest Control
  • Landscaping

5% Finder’s Fee Agreement:

Our fee agreement will pay 5% for any proprietary deal brought to us by our partners (i.e. one not already represented by a sell-side intermediary). This is intended to help our partners with deals where the companies are reluctant to pay a fee but where a company may be a good prospect for Skylight.

For those already represented by a sell-side intermediary, we will pay the higher of 2% or a Standard Lehman Formula.

Download a copy of the Buy-Side Agreement: