The professionals of Duff & Phelps Capital Partners (“DuffCap”) have pioneered several proprietary investment techniques based upon the core Intellectual Capital (“IC”) expertise of the DuffCap team in combination with the proven sell-side advisory experience of Duff & Phelps, LLC. In essence, DuffCap looks to augment a traditional middle-market buy-out investment with a much smaller parallel venture investment in related technology. When complete, the technology is then levered across the newly purchased/aggregated entity to enhance margins through incremental services, price premiums and/or cost savings. As a result of this innovative approach, an investment made at attractive EBITDA pricing can be enhanced both in terms of profitability and valuation multiples.

Termed an “IC Enhanced Buyout™”, DuffCap’s investment strategy is designed to generate venture capital returns with a leveraged buy-out risk profile. The risk profile is managed through both investment weighting as well as after-tax recovery on non performing technology investments.

There are three primary criteria for a IC Enhanced Buyout investment: (i) a proven Chief Executive Officer and management team with value creation experience in the industry to be consolidated; (ii) a fragmented industry, in which a large entity (sales greater than $100M) can be built at reasonable acquisition pricing and debt leverage; and, (iii) proprietary technology and a qualified Chief Technical Officer capable of a timely deployment of margin-enhancing IC across the acquired base.