Source Talks is a series where we discuss deal origination with PE and M&A pros, in collaboration with David M. Toll of Private Equity Career News.
In the latest installment we speak with Michelle Eidson, Principal, Head of Business Development at Crest Rock Partners about the firm’s operational and strategic expertise as well as insight into a recent transaction, how they achieved it, and what they are looking forward to.
Michelle, tell us about Crest Rock Partners and the kinds of transactions that you do there.
Crest Rock Partners is a lower-middle-market-focused private equity firm. We’re based in Denver, Colorado. We were founded in 2019, and we invest in software and technology, IT services and business services, and industrials and manufacturing. That’s a broad swath of the GDP but one thing we always look for are founder-owned businesses or businesses where the management team recognizes they’d like a partner to help achieve their growth goals for the next phase. We bring more than just capital to the table. We’re also bringing operational and strategic expertise. From a size perspective we’re writing equity checks between $15 million and a $100 million. We don’t really focus on EBITDA, we’re more focused on a substantially sized business. $20 million dollars is kind of our minimum. On the software side that would translate to about $10 million in ARR.
Describe your firm’s approach to finding those transactions and the role that technology plays in that.
We have a business development team which I lead, and we’re heavily focused on relationship development and maintenance and on our brand. We certainly need to use technology in both of those cases. For us, being in touch with the most relevant contacts is really important on a regular basis but then we’re also trying to have touch points across the entire market. We use technology to really gauge where we should be focused based on last point of contact, deals that those firms are getting done, and other metrics which we track both through internally developed systems as well as by using technologies like Sutton Place Strategies that help us identify firms that are actually active in closing transactions in our sector focus areas.
Michelle, I know you just acquired a company called Relocity there, tell us a little bit more about that transaction and how you found it.
Relocity is in the relocation services space. It’s a very sophisticated technology platform that helps large companies move their employees all over the world. It really creates an experience that makes those employees very sticky to their to their firm that they work for. This deal had been out in the market a couple of years ago and we took a look at it then and it ended up not closing with any buyer. And then in 2023 when the market was slow, I sent my investment team to a few different conferences. One of which was the HR Tech conference in Las Vegas. There they met with a number of investment bankers in meetings that I helped arrange for them. One of them reintroduced Relocity. They were back in market with a new advisor. We took a go at it, and we managed to close it. It’s also a niche industry sector too so there’s obviously some M&A opportunities that we’d love to take advantage of. So, anyone listening if you know of any companies in the space, give me a call at Crest Rock and we can talk about whether or not it’s the right fit for Relocity.
