Sachs Capital will announce later this morning that it is rebranding with a new name: Mauloa. The firm is also announcing its final investment under the old moniker. To find out more, PE Hub spoke with chief executive Andrew Sachs and chief investment officer Tyler Weinberg.
“Mauloa means ‘endless’ in Hawaiian, and that is how we view companies – with an endless perspective,” said Sachs. “Companies are bought and sold, and it all has to do with timing, when it is a good time to sell. We do not know when that time will come, so we have always built our companies with a strong balance sheet and with a business model that produces free cashflow.”
Founded in 2007 and headquartered in Potomac, Maryland, Sachs Capital has raised two funds, the first in 2007 and the second in 2015. Today, the firm announced its last transaction, a minority investment in Mr. Christmas, a holiday decorations maker. Mr. Christmas and the other portfolio companies will continue to be managed by Sachs Capital.
“We have always been minority, no-control investors,” Sachs said. “That is our niche, but we are stepping up our advisory/operational management power. We still don’t seek to run the companies, but we are putting together a strong advisory board who are all operators, who will be board members on portfolio companies and can also go in, if needed.”
Sachs described the transition as “institutionalizing Sachs Capital,” saying that “this was the right time to rebrand and evolve into something bigger and better.”
The strategy is to own less than 50 percent of a portfolio company in preferred equity with no debt on top, and to structure deals so that there is no way to be redeemed out and no way to replace the management team.
“It is really all about long-term partnership and economic alignment,” Weinberg said. “We are a truly a partner and not a short-term financing solution.”
He added that when Mr. Christmas was being shopped around, the company had many other options to sell the whole business, but Sachs Capital was the only potential investor pitching a minority investment.
“As a third-generation company that has never had outside capital before, they called all of our references, and the feedback they got from our former partners is one of the key reasons why they chose us,” he said.