Gart Capital

 

Overview:

Gart Capital Partners (“GCP”) is a private equity investment partnership located in Denver, Colorado. The firm, a division of The Gart Companies, provides closely held and family owned businesses with private equity capital for ownership transition and growth. We invest in a broad range of consumer and retail businesses that include, but are not limited to, specialty retailing and accompanying services, recreation, sports and sporting goods, and leisure activities. By focusing on businesses that fit with our core competencies, we feel we can achieve a higher level of added value for the companies and management teams with whom we partner. The Partners have a unique combination of practical operating experience in managing the day to day operations of businesses and the sophisticated financial background to help an independent company grow. We are moving from direct, hands-on operators to being mentors, providers of resources, and support to the management of the additional companies in which we invest equity.

 

We seek opportunities in the smaller, middle market – defined as businesses with annual revenues of $5 million to $200 million and EBITDA of $1 million to $15 million. We feel this segment of the market is underserved by larger private equity players and the traditional capital markets are not properly addressing the needs of companies this size.

 

This situation creates an opportunity for GCP to identify unique opportunities and invest side by side with management to help them grow the business. GCP looks to partner with management teams that have made significant ownership commitments to their businesses. Through mutual alignment of interests, we are able to craft unique partnerships that help businesses grow and will create value. GCP invests its own capital and is not restricted by any specific investment requirements or exit parameters. This unusual structure allows us to address the individual needs of each company and not be held captive to any outside influences that could interfere with the value creation process.

 

The team has extensive experience in specialty retail, and other consumer related businesses, real estate, finance, marketing, high growth companies, and unique capital structures. The parent company, The Gart Companies, is a multi-faceted corporation that owns, and operates, a large network of 120 specialty sports stores targeting skiers, snowboarders, cyclists, golfers, fly fishermen and women. The company also owns a retail-based golf instruction company called GolfTEC. GolfTEC uses proprietary technology to provide high tech indoor golf lessons in 2,500 square foot locations.

 

GolfTEC is now franchising the stores and has over 50 locations open nation wide with 35 more stores to open in the next 12 months. Additionally, the company owns a real estate management and development company with over 2 million square feet of retail shopping centers and numerous resort residential condominium projects.

 

Investment Focus and Strategy:

GCP seeks to generate superior rates of return by investing in equity and equity-oriented securities of smaller, middle market companies.

GCP is looking for opportunities that meet the following criteria:

•  Established businesses with infrastructure to support growth.

• Annual revenues in excess of $5 million.

EBITDA of at least $1 million.

Management teams that have made a significant financial commitment to the business.

Potential for above average industry growth.

Majority control or significant minority position investments.

Industry sectors where management has a high level of control over the elements that drive success.

GCP applies a disciplined investment approach to building it’s portfolio of companies by making initial investments of $3-10mm in 2-3 companies per year. We will also fund attractive follow-on opportunities within our portfolio as they occur.

Our investment process follows several steps. To start, we leverage our extensive regional network of contacts and strong industry ties in an attempt to identify unique opportunities that fit with our specific investment criteria. Most attractive investment opportunities are marketed to more than one capital source. In these situations, when management is playing a key role in deciding the private equity partner, we feel our depth of industry specific knowledge and experience will give us an advantage over the competition. We have a demonstrated track record of successfully partnering with management teams that makes us different from other private equity players that focus on the same niche. By employing a partnership approach during the due diligence phase, we can more quickly and efficiently identify the key opportunities and risk factors associated with each investment we consider. We believe that if we can successfully align our goals with those of management, we will have a better chance of creating maximum value for everyone. Prior to closing on an investment, we will discuss exit strategies and alternatives that best fit the needs of all shareholders involved. Potential exit possibilities are: 1) sale of the entire company 2) sale of GCP’s interest back to the company on preagreed terms, or 3) an initial public offering. The partners of GCP feel that working as a team to successfully execute the business’s growth strategy will eventually allow for the opportunity to successfully and profitably exit the business.