Rakesh Kapoor: Ceramics Expo 2022

Understanding Growth Opportunities and Development Capacities for Lower Middle Market Ceramics Companies Panel

The US ceramics industry is largely dumbbell shaped, with a select number of large multinationals dominating the space, and many lower middle market companies (sales of $20M to $50M) making up the rest.
Lower middle market companies can face formidable barriers to further growth including strategy development and implementation, accessing new markets (including international), and upgrading financial and information systems.
Strategics investors (large multinationals) hesitate to acquire such companies and instead look to private equity (“PE”) for aiding these companies to prepare them for further growth.
Growth of these companies is key to continuing the development of the ceramics industry, and one solution to doing so is through PE investment. Although popular in other industries, PE is not largely known about in the technical industries.
The terms Venture Capital (“VC”) and PE are often (incorrectly) seen as similar. However, VCs follow a strategy focusing on startup companies and only a few companies in their portfolio achieve tremendous success. PE firms invest in later-stage companies with established earnings.
An owner-operator / founder looking for a PE investment partner should conduct diligence before selecting the partner. Ask the PE firm for references of prior CEOs they’ve partnered with and relevant industry contacts. Ensuring alignment in approach and in core values is crucial.