Lakelet Capital has acquired seven companies in the past few years in its search to take private local businesses “from version 1.0 to version 2.0,” in the words of managing partner Randy Bianchi.
The Buffalo-based firm had a few more deals in the pipeline when the Covid-19 first began to make a deep economic impact here in March, and at least one of those deals still has a chance of going through.
But Bianchi said the firm’s first reaction was to focus on its existing portfolio, helping each business apply for federal Paycheck Protection program loans (they were all approved); combing through the businesses to build new plans around employee safety and falling revenue; and reaching out to vendors and customers to get a sense of the impact.
That proactive, communicative approach helped Lakelet’s businesses begin to peer around the corner and build new strategies going forward, he said.
“If you were an absentee owner who hasn’t been involved with the business and you’re not taking the time to go back and rebuild, you’re going to have a hard time getting out of this,” he said. “But the companies that are being proactive could see new opportunities.”
Bianchi said Lakelet has brought on two new team members recently, pushing its employee count to 10, and will continue sourcing deals. He said the basic metrics of an investable company – strong business, a fair price, a clear pathway for long-term private equity to enact growth – haven’t changed.
But he said there will certainly be winners and losers emerging from this crisis, so the landscape of individual players could shift substantially.
“In every segment of the economy, there are going to be fringe players who you’re not thinking about, who are spending this time focused on upgrading processes and positioning themselves in the market,” Bianchi said. “They’re saying, ‘This is an opportunity I can take advantage of.’”
Thank you Dan Miner for consistently covering executives in the Buffalo area.
See article in Buffalo Business First