Investment Approach
Disciplined Acquisition. Operational Partnership.
Brown Rock's acquisition process is built around rigorous underwriting, thoughtful transaction structuring, and genuine commitment to the businesses we acquire.
Our Process
How We Acquire and Build
Sourcing & Identification
We source acquisition opportunities through investment bankers, business brokers, M&A advisors, and direct outreach to business owners in our target sectors. We focus on businesses with strong fundamentals, defensible market positions, and capable management teams.
Underwriting & Diligence
We conduct thorough financial, operational, and commercial due diligence. Our underwriting focuses on earnings quality, customer concentration, competitive dynamics, and the specific drivers of each business — not on financial engineering.
Transaction Structuring
We structure transactions to provide business owners with certainty and flexibility. We pursue majority acquisitions, founder transitions, and recapitalizations — and we work to understand what matters most to each seller before proposing a structure.
Capital Partnership
Acquisitions are capitalized on a deal-by-deal basis through partnerships with institutional lenders, private credit providers, and co-investors. Each transaction is capitalized with partners who are aligned with that specific opportunity.
Operational Value Creation
After closing, we work alongside management to improve operations, invest in growth, and build the business. Our focus is on organic improvement, customer retention, and strategic investment — not cost reduction or financial restructuring.
Strategic Add-Ons
Where appropriate, we pursue strategic add-on acquisitions to expand capabilities, enter new geographies, or build scale within a platform. Add-on acquisitions follow the same disciplined underwriting process as our initial acquisitions.
Investment Criteria
What We Look For
Brown Rock focuses on established, profitable businesses in the lower middle market. We are primarily interested in majority acquisitions but may consider structured minority investments where there is a compelling strategic rationale.
Revenue & Profitability
Revenue of $10M–$100M and EBITDA of $2M–$15M. Businesses with proven operating histories and consistent cash flow generation through economic cycles.
Defensible Customer Relationships
Long-standing relationships with government agencies, prime contractors, utilities, and institutional customers. Customer concentration is evaluated carefully — we look for relationships that are sticky, not just large.
Recurring or Contracted Revenue
Contracted, recurring, or highly visible revenue streams. We value businesses where a meaningful portion of revenue is predictable and not dependent on winning new business each year.
Defensible Market Position
Competitive advantages that are difficult to replicate — certifications, licenses, technical expertise, customer relationships, or scale. We look for businesses that have earned their position in their markets.
Capable Management
Experienced operators who understand their markets and customers. Management continuity is important to us — we partner with the people who built the business, not around them.
Growth Potential
Clear opportunities to create value through operational improvement, organic investment, geographic expansion, or strategic add-on acquisitions. We look for businesses where our involvement can make a meaningful difference.
Geography
United States & North America
Brown Rock focuses on businesses headquartered in the United States, with selective interest in Canadian and broader North American operations where they are part of a U.S.-based platform.
Representing a Business?
We are an active, responsive buyer for investment bankers, business brokers, and M&A advisors. We welcome deal submissions and introductions.