The Spire team has attempted to address additional questions it has received from:
- company owners seeking liquidity or capital for expansion;
- executives seeking to partner with Spire to acquire a business;
- investors trying to better understand Spire’s investment thesis and alpha;
- investment bankers seeking to cover Spire’s industries of focus.
Question: Does Spire invest alongside other firms or investors? Answer: Spire often invests alongside other firms and investors. It is Spire’s goal to partner with the most strategic resources available to develop the right investor base for the Company’s growth aspirations and value added minds around the table.
Question: Does Spire require its investments to include majority control?Answer: Spire prefers to make control investments, but it is not a requirement of Spire’s investment thesis.
Question: How much capital does Spire typically invest in a company and how is the investment structured? Answer: Spire typically invests from $15M to $40M in each of its companies. Spire invests in some form of the equity structure of the company; depending on the scenario, Spire’s investment could be structured as preferred stock or common stock.
Question: How long does Spire normally hold its investment in its companies? Answer: Spire raises funds with a 10-year life. Spire typically invests in companies for 3-7 years, but each situation is custom and is evaluated with each of its specific attributes.
Question: What does Spire consider its Alpha? Answer: Spire professionals are true partners to each of our management teams and partner with them in setting goals for growth, culture building, strategy and everything in between. Spire has an extensive network of relationships in the industries we invest that help each of our companies form business relationships and better serve their customers and partners.
Question: Does Spire partner with executives seeking to be a CEO to find companies to acquire and partner together? Answer: Yes. Spire uncovers the companies in which it invests in a variety of ways including through executives of which Spire partners to find companies in a specific industry vertical in which they have expertise / past experience.
Question: What is the financial profile of companies in which Spire invests? Answer: Spire will invest in companies with EBITDA ranging from $3 million to $15 million.
Question: Are there any business attributes Spire prefers in its companies? Answer: Spire typically likes to invest in companies that provide quality products/services that meet a market demand and require frequent engagement by the product’s/service’s customer. Positive business attributes of which Spire seeks in its companies include: long term contracts, proven operating history/management team, recurring attributes to revenue lines, intellectual property and barriers to entry (geographic, regulatory, proprietary methodology, unique assets, etc.).
Question: Are there any over-riding themes in Spire’s investment thesis regarding market opportunity? Answer: Spire invests in companies that have a significant market opportunity for organic growth and/or growth through acquisition. Spire terms this as “Buy & Grow” or “Buy & Build” scenarios. In each of Spire’s 20+ platform companies the management teams and Spire have strategic discussions to identify opportunities to invest in new products/services for growth or expand geographically to drive growth. In at least half of Spire’s investment companies, the management teams and Spire have worked together to identify opportunities to acquire other companies/competitors, or make add-on acquisitions, to enhance the profile of the company. In scenarios where additional capital will be required by portfolio companies to make add-on acquisitions, Spire typically sets this capital aside at the time of its initial investment to provide for future capital needs.
Question: Does Spire have a geographic preference for its investments? Answer: Spire concentrates its investment activities in the United States. Although Spire’s companies are headquartered in the United States, all of Spire’s portfolio companies have revenue streams generated from outside the United States ranging from 5% to 60% of total revenue.
Question: How does Spire describe its involvement with its portfolio companies? Answer: Spire invests in companies with management teams that have a vision to grow a company and the experience to effectively manage that type of growth environment. Spire does not intend to, or want to, operate the companies in which it invests. Spire plays an active Board role, business development role, C-level facilitation role and partner role that is required at any given time. Spire prides itself on helping its companies create value, help its management teams think through strategic decisions and drive growth by utilizing the global relationships our investment professionals have collectively developed over time.