Industry First

Industry First is the proprietary, research-based process through which the Falfurrias team identifies attractive growth markets and partners with talented industry executives to build growth businesses.

Industry First starts with the development of a thesis identifying growth markets with durable trends and in which incremental value creation may be created through Falfurrias resources. In most cases, a senior executive with a proven industry track record is retained to assist in developing this thesis and identifying investment opportunities.

Once completed, Falfurrias publishes its thesis to investment bankers, service providers, and target businesses in an effort to identify targets that will benefit from the distinctive advantages delivered through a Falfurrias partnership.

When a matching opportunity arises, the Industry First thesis becomes a significant part of due diligence and an integral component in the company's strategic planning and tactical execution during the Falfurrias investment period.

Technology-Enabled Services for Financial Institutions
Durable Growth Trend: Technology, data, and services to better enable financial institution management
Completed Acquisition: Marquis Software Solutions, Inc., Tax Guard
  • Working alongside Susan Faulkner, Falfurrias recognized the growing need for technology tools that could identify and enable additional revenue opportunities for financial institutions (FIs), and in particular, incremental revenue opportunities for small and medium size banks and credit unions that lacked the resources to build such tools in-house.
  • Falfurrias Capital and Ms. Faulkner identified Marquis as a platform investment opportunity that provided software and services to FIs enabling actionable intelligence that can drive revenue growth.
  • In September, 2016, Falfurrias announced a majority investment stake in Marquis and Ms. Faulkner joined the company as CEO of the business.
Susan Faulkner

Susan Faulkner has over 30 years experience in the financial services industry and expertise across bank strategy and operations as a former executive with Bank of America. Ms. Faulkner led FCP's tech-enabled services for financial institutions industry first campaign and was immediately appointed CEO of Marquis Software Solutions upon the firm's investment in the business in September, 2016.

Financial Institution Compliance Services And Technology
Durable Growth Trend: Technology investments to automate compliance
Completed Acquisition: RegEd
  • With Joe Price, Falfurrias researched the growing regulatory compliance demands and the ways in which financial institutions are turning to technology and service providers to efficiently manage these processes and costs
  • RegEd is a provider of regulatory compliance software and services for financial institutions, including many of the largest, multi-national broker-dealers and insurance companies. RegEd's suite of compliance technology and solutions allow institutions to efficiently and cost effectively manage the growing number of regulations impacting their operations.
  • In July 2015, Falfurrias announced a majority investment in RegEd and Mr. Price was appointed to the Board of Directors.
Joe Price

Joe Price is Falfurrias' retained executive for the Financial Institution Compliance Services and Technology Industry Campaign. Mr. Price has spent his entire career in financial services including several executive positions at Bank of America. Mr. Price is an active member of all deal teams when reviewing deals in this sector, as well as proactively identifying new investment opportunities.

Transmission & Distribution Infrastructure
Durable Growth Trend: Aging utility infrastructure
Completed Acquisition: North America Transmission & Distribution Group
  • Alongside Dave Pacyna, Falfurrias uncovered numerous trends - including the aging of our nation's electric power infrastructure - which are driving sustained investments in T&D hardware by electric power utilities
  • NATDG is a holding company formed to meet the growing demand for highly engineered T&D components and capture additional share by combining complementary T&D businesses, leveraging engineering capabilities, and investing in sales resources
  • NATDG acquired ITEC, an OEM of instrument transformer products, in March of 2013
  • Advanced Control Systems, a provider of grid automation software and hardware, was later acquired in February of 2014
Dave Pacyna

Dave Pacyna formerly led Siemens' North American T&D Group, growing it organically and by acquisition from $200 million to more than $2 billion in annual revenue. Mr. Pacyna led FCP's T&D infrastructure campaign and was appointed CEO of NATDG upon our initial campaign investment in 2013.

Industrial Automation and Safety

Durable Growth Trend: Reshoring and workforce transformation
Completed Acquisitions: SixAxis, E-Technologies Group

  • After decades of outsourcing manufacturing to low-cost labor countries, domestic manufacturers are beginning to ramp up investments in U.S. manufacturing operations by both "re-shoring" work and building new manufacturing capacity in the U.S.
  • Falfurrias Capital partnered with Ken Walker to identify domestic manufacturers and service providers that are making investments in industrial automation technologies that reduce labor costs and improve safety and quality.
  • In September 2017, Falfurrias announced a majority investment in SixAxis, a world leader in the design and production of safety and productivity equipment. Mr. Walker is now the Executive Chairman of SixAxis.
  • In February 2018, Falfurrias closed an investment in E-Technologies Group, a leading provider of software and automation systems integration, and engineering design services. Mr Walker joined the Board of Directors of E-Tech.
Ken Walker

Ken Walker was previously the Chief Operating Officer of EnPro Industries, Inc. (NYSE: NPO) where he led a $1.4B organization with 50 manufacturing centers in the Americas. Mr. Walker became SixAxis' Executive Chairman at the time of the investment and joined the Board of Directors at E-Technologies Group.

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Other Representative Campaigns

Asset-Liability Management Software & Services (Active Campaign)

Durable Growth Trend: Technology, data, and services to better enable financial institution management

As a result of historically low interest rates in the last decade, many banks no longer possess or resource robust asset-liability management (ALM) capabilities. ALM refers to the practice of managing interest rate risk, which insures that the expected interest margin is greater than the forecasted liabilities, including the cost of deposits. ALM capabilities are fundamental to how banks and credit unions preserve capital and generate earnings, but effect interest rate risk management is enormously complex. Due to this complexity and in anticipation of rising interest rates in the next decade, most institutions are expected to increasingly rely on third-party consultants or software to support an active ALM program that also fulfills the expectations of regulators.

Packaged Foods (Active Campaign)

Durable Growth Trend: Shifting consumer preferences

An increased focus on health and wellness, shifts in food purchasing patterns by millennials, and the proliferation of specialty diets are creating opportunities for niche packaged food brands to take market share from industry leaders. At the same time, many national brands suffer underinvestment in marketing and supply chain management. Through a formalized partnership with a national food brokerage, Falfurrias believes we can leverage proprietary data analytics to identify high-potential regional niche brands as well as "orphaned" national brands embedded in larger consumer products companies, and help grow these brands through strategic investment.

Bankruptcy and Collection Services

Durable Growth Trend: Technology, data, and services to better enable financial institution management

Banks continue to shift non-core but mission-critical processes to technology-enabled providers delivering specialized capabilities that involve data-intensive exercises and attract regulatory scrutiny. Most recently, increasing levels of consumer debt and the threat of rising interest rates have led financial institutions to re-examine the ways in which it monitors and manages processes related to consumer bankruptcy and collections. These processes are currently fulfilled through manual, organic resources, but increasing demands on these personnel and systems is expected to promote above-market growth for third-party technology and service providers who can deliver enhanced efficiency while exceeding regulatory standards.

Visitor and Vendor Management Platform

Durable Growth Trend: Safety and contingent workforce

Companies and institutions across virtually all end markets increasingly need to pre-qualify, screen and monitor incoming populations driven by regulatory pressure, safety concerns or cost efficiencies. Furthermore, as the U.S. economy increases its reliance on contingent workforces, companies will need to address a growing population that is currently under-monitored but requires the same screening processes as employees. We believe there is an attractive opportunity amid a fragmented universe of vertically-focused vendors today to build a multi-vertical visitor and vendor management platform. We believe the benefits of such a platform would include increased scale, diversification, greater "network effect" among visitors & vendors, and a wealth of data that could lead to value beyond existing service offerings.

Hard Skills Training and Education

Durable Growth Trend: Increasing regulation and online adoption
Completed Acquisition: American Safety Council

Corporations and consumers are increasingly turning to online providers to meet their education and training objectives, especially in markets that are driven by regulations or government oversight. Falfurrias has identified the potential to build a diversified provider of e-learning solutions for regulatory-driven end markets that could accelerate growth through acquisition, investments in technology, and leveraging sales & marketing infrastructure. In 2014, we acquired American Safety Council, an e-learning provider for driver safety and workplace safety.

Vertically Focused Marketing Services

Durable Growth Trend: Domain specific marketing tools and services
Completed Acquisition: GlynnDevins

The sales & marketing process in some industries necessitates a more specialized capability than many traditional marketing agencies can provide. Falfurrias researched industry verticals where the sales process involved unique market attributes that require targeted market knowledge, experience, and technology. In June of 2015, Falfurrias acquired GlynnDevins, a firm that provides technology-enabled marketing solutions for the senior living space.

Pet Services

Durable Growth Trend: Humanization of pets and national pet ownership

The U.S. pet industry is the seventh largest retail industry in the U.S. that has grown 5% since 2006. The industry continues to exhibit macro tailwinds as pet ownership continues to grow and owners increasingly "humanize" their pets and treat pet product and service spending as nondiscretionary. Falfurrias believes there are significant opportunities for veterinarian outsourced services with an emphasis on financial services – pet insurance, wellness plans and alternative consumer finance plans.

Healthcare Revenue Cycle Management

Durable Growth Trend: Shifting payer mix and increasing provider sophistication

The healthcare industry in the US has undergone significant transformation as a result of changing regulations with the Affordable Care Act. This includes a transitioning coding system and increasing pressures to improve patient services while simultaneously lowering costs. In general, healthcare providers are not well-equipped to manage their revenue cycles internally, and they have experienced lower rates of collection and further expense pressures accordingly. Such market dynamics are leading to increased utilization of outsourced RCM providers to improve cash flow, increase productivity / efficiency, and ensure accurate reimbursement through a higher degree of specialization and expertise.

Healthy, Fast Casual Restaurants

Durable Growth Trend: Shifting consumer preferences

FCP believes that there is a growing demand for fast casual restaurants serving consumers wanting healthier (both real or perceived) products. Consumer preferences are changing in favor of healthy food, eating out, and dining quickly. Such market dynamics make opportunities in the space attractive on their own, and combined with the firm's Bojangles' experience, Falfurrias believes it can to add value to healthy, convenient restaurants.

Multi-Concept Franchise Home Services and Home Care

Durable Growth Trend: Senior population and care trends

FCP believes an opportunity exists to build and grow a diversified multi-concept franchise in the home health and home care space. A full continuum of care offers skilled patients ability to progress into unskilled or move into hospice with the ease of one provider while capturing the full revenue stream. In addition, increasing complexity of regulations allows franchise platforms of scale to truly differentiate themselves by offering value-added resources to franchisees and through superior execution.

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