Capital Southwest Corporation (CSWC) is a Dallas-based business development company that specializes in private equity, credit, and venture capital investments in middle market companies. The firm invests in mezzanine, later stage, mature, late venture, emerging growth, buyouts, recapitalizations, and growth capital investments. However, it does not invest in startups, publicly traded companies, real estate developments, troubled companies, turnarounds, or firms in which significant senior management is departing. In the lower middle market, CSWC typically invests in growth financing, bolt-on acquisitions, new platform acquisitions, refinancing, dividend recapitalizations, sponsor-led buyouts, and management buyouts. The investment structures are Unitranche debt, subordinated debt, senior debt, first and second lien debt, and preferred and common equity. Moreover, the firm makes equity co-investments alongside debt investments, up to 20% of total check and only makes non-control investments. It seeks to invest in a range of industries, including industrial manufacturing and services, value-added distribution, healthcare products and services, business services, specialty chemicals, food and beverage, tech-enabled services, and SaaS models. CSWC prefers to invest in energy services and products, industrial technologies, and specialty chemicals and products. In energy services and products, the firm seeks to invest in each segment of the industry, except for exploration and production, with a focus on differentiated products and services, equipment and tool rental, consumable products, and drilling and completion chemicals. In industrial technologies, it seeks to invest in automation and process controls, handling and packaging equipment, industrial filtration and fluid handling, measurement, monitoring and testing, professional tools, and sensors and instrumentation. Lastly, in specialty chemicals and products, the firm seeks to invest in businesses that develop and manufacture highly differentiated chemicals and products. CSWC seeks to invest in the United States, with investments ranging from $5 to $25 million in securities. Equity investments range from $5 million to $50 million, and debt investments between $5 million and $20 million. The firm looks for companies with revenues approaching above $10 million, profitable operations, and a historical growth rate of at least 15 percent per year. Within the lower middle market, it seeks to invest in companies with less than $15 million in EBITDA and opportunistically invests in the upper middle market, primarily defined as companies with EBITDA in excess of $50 million. In addition to making direct investments, CSWC allocates capital to syndicated first and second lien term loans in the upper middle market. To qualify for syndicated 1st lien, EBITDA size should be more than $30 million, closing leverage greater than 4 times, investment hold size between $5 million and $7 million, and investment yield greater than 6.5%. For syndicated 2nd lien, EBITDA size should be more than $50 million, closing leverage greater than 6 times, investment hold size between $5 million and $7 million, and investment yield greater than 9%. The firm prefers to take a majority and minority stake, and has the flexibility to hold investments for an extended period in its portfolio companies. It may also invest through warrants and takes a board participation in its portfolio companies. CSWC was founded on April 19, 1961 and has been serving as a prime example of best practices in the private equity industry ever since.
Capital Southwest's ticker is CSWC
The company's shares trade on the NASDAQ stock exchange
They are based in Dallas, Texas
There are 11-50 employees working at Capital Southwest
It is capitalsouthwest.com
Capital Southwest is in the Financial sector
Capital Southwest is in the Asset Management industry
The following five companies are Capital Southwest's industry peers: