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Information Technology-Based Segments Capitol Partners has been implementing its 'platform investment' strategy in high-growth, yet fragmented, segments of industries in which the use of information technology can support a differentiated competitive strategy for providing either a scale-intensive, low-cost product-service in which scaled technology reduces per unit costs or a high value-added, premium product-service in which technology expands and deepens the product-service offering. Health Care Capitol Partners has focused on the back office processing segment as one of its health care industry platforms to invest in. This sector enables a properly positioned company to benefit from the strong growth drivers behind health care while at the same time investing in a high margin business with significant economies of scale. The core growth in this sector is complemented by the opportunity for growth from the acquisition of the numerous small competitors in this fragmented industry. Through its management-led buyout of CareSouth Health System and from subsequent add-on acquisitions including the asset purchase of a large division from a publicly-traded industry participant, Capitol Partners has grown this 'platform' company into the nation's largest administrative services firm to the home health care industry. Through CarePartners@Home, Capitol Partners has been aggressively acquiring specialty health care divisions in joint ventures with major health care systems. These assets are, in turn, serviced by scale-intensive, cost-advantaged CareSouth. Internet Similar to the firm's investments in the health care information technology sector, Capitol Partners is attracted to the Internet space because it offers a combination of high core industry growth, high operating leverage, and the availability of acquisitions for complementary growth. Among the several Internet sector opportunities which it is pursuing, Capitol Partners has been particularly active in the Internet application service provider (ASP) sub-segment. Capitol Partners launched eCareOne.com as the health care industry's first administrative services ASP. Infrastructure-Based Segments Capitol Partners is also pursuing its 'platform investment' approach in industries requiring heavy infrastructure investments like the telecommunications and energy sectors. Similar to its investments in information technology sectors, infrastructure-based industry segments offer high operating leverage and create significant incremental cash flows as well as barriers to entry for those who are able to grow quickly. Investments in these segments traditionally are larger, they have a larger debt component, and they involve companies further along in their life cycles. Telecommunications As the communications marketplace continues to consolidate and service offerings blur previous distinctions, Capitol Partners is well-positioned to capitalize on opportunities to compete in this changing marketplace by leveraging its information technology- and infrastructure-based investment experience. Energy The firm's extensive and deep relationships within this industry, and in particular the oil and gas segments, permit Capitol Partners to successfully deploy its scale-driven strategy in niche sub-markets. Continued deregulation in the sector has created unique opportunities for focused, scale-driven participants. What is our overall strategy? What type of opportunities interest us? How do we typically structure transactions? |
