Episode Summary
Executive Summary: The episode examines the Jordan Company’s unlevered, long-term investment in Silvis, a wireless mesh networking business serving mission-critical, harsh-environment communications. Rich Caputo and Eric Fagan explain how Jordan sourced, diligenced, and ultimately won the deal after initially losing it to a strategic, then grew the company through operating support, ownership alignment, and selective M&A.
Main Topics: Jordan Company’s middle-market strategy (Priority: 5/5): Rich Caputo outlines Jordan’s 40+ year focus on middle-market businesses, especially industrial, logistics, and service-oriented companies where technology is increasingly essential. What Silvis does and why it matters (Priority: 5/5): Silvis designs mesh networking hardware/software that enables video, voice, and data transmission without fixed infrastructure, serving law enforcement, robotics, unmanned systems, broadcasting, and other mission-critical environments. Sourcing, diligence, and winning the deal (Priority: 5/5): Eric Fagan describes entering a strategic-only process through a portfolio-company relationship, validating the technology with ACR Electronics, and eventually reclaiming the deal after losing it to a strategic buyer. Culture and management-team fit (Priority: 5/5): The speakers emphasize Jordan’s preference for collaborative, coachable managers and the importance of broad employee ownership, which matched Silvis’s founder-led, team-oriented culture. Value creation through operating support (Priority: 4/5): Jordan added value by hiring a CFO and operating officer, expanding facilities, improving procurement and supply chain resilience, and helping build a more robust sales organization. Capital structure and long-term ownership (Priority: 4/5): The deal was intentionally done with no initial leverage because the business was young and lumpy; later, only modest leverage was added and eventually paid down by cash flow. M&A, product expansion, and exit philosophy (Priority: 4/5): Jordan pursued selective acquisitions that strengthened Silvis’s specialization, while resisting broad roll-up behavior. They prefer to let the business compound and preserve future options rather than force an exit or recap.
Key Arguments: Middle-market industrial technology assets can be highly attractive when secular demand, technical differentiation, and operational support needs align. A strong management team is judged less by formal testing and more by repeated interactions, references, customer checks, and evidence of collaboration and coachability. Jordan can win competitive deals against strategics by offering founders a compelling combination of financial backing, operational help, and continued ownership. Unlevered or lightly levered structures are prudent for younger, growth-oriented companies with commercialization risk and lumpy cash flows. Broader employee ownership supports stronger culture and performance because it aligns incentives across the organization. Selective acquisitions should make the core business better for customers, not just increase scale; Silvis was kept as a pure-play technology provider. Technology-driven demand and geopolitical uncertainty have improved the investment case over time rather than weakened it. Patient ownership can be an advantage when the company is still in an inflection phase and customers/adoption are expanding.
Data Points: Jordan Company founding year: 1982 - Rich Caputo said Jordan was founded in February 1982 by Jay Jordan. Jordan Company assets under management: $23 billion - Mentioned in the introduction as the firm’s current scale. Middle-market businesses in the U.S.: around 200,000 - Ted Seides framed the size of the middle market. Middle-market revenue range: $25 million to $1 billion - Definition of the middle-market businesses discussed. U.S. workforce employed by middle-market businesses: 50 million people - Ted noted these businesses employ almost a third of the U.S. workforce. Share of total U.S. private equity deal value: two-thirds - Middle-market businesses represent this share of PE deal value. Silvis founding year: 2004 - Eric Fagan said the company was founded in 2004 by the current CEO. Commercial product launch: 2011-2012 - Silvis commercialized its product in this period. Meaningful revenue ramp: 2016-2017 - Eric said revenue started to get real in these years. Initial EBITDA: a little bit north of $10 million - Rich described the business at the time of purchase. Initial bid valuation: low double-digit EBITDA multiple - Rich said the original bid was at a low double-digit multiple. Leverage at initial acquisition: 0x - Jordan intentionally bought Silvis with no leverage. Later financing leverage: 2x - They later completed financing with two times leverage. Current leverage: 0x - Debt has since been paid down from cash flow. Ownership structure at Silvis: every employee became an owner - Rich said Jordan made every employee of Silvis an owner. Management team meetings before signing: about 5 - Rich said they saw the management team about five times before signing. Portfolio company used to access deal: ACR Electronics - Jordan gained entry to the process through this existing portfolio company. Add-on acquisitions by ACR: 11 acquisitions - Rich said ACR had completed 11 acquisitions by 2018. Jordan’s industrial-tech platform count: 7 or 8 platforms - Eric said Jordan had built multiple platforms over the past 10 years. Add-ons completed across those platforms: over 40 - Eric described the firm’s add-on acquisition activity. Silvis employee base growth: tripled - Rich said the employee base of the company had tripled since the transaction. Current acquisition review set: about 50 other acquisitions - Eric said they had looked at roughly 50 other acquisition opportunities over four or five years.
Pivotal Quotes: "this is right in the sweet spot of being our kind of deal" — Rich Caputo: Explaining why a smaller, tech-enabled Silvis fit Jordan’s middle-market strategy despite not being a typical size. "We could be that strategic." — Eric Fagan: Describing Jordan’s pitch to the seller that a financial sponsor could provide the same support as a strategic buyer while preserving founder ownership. "If we don't have that, if we don't see that in that partner... it's not going to be someone we're going to partner with anymore." — Rich Caputo: Rich explaining Jordan’s heightened emphasis on collaboration and coachability in management-team selection.
Implications: For investors, the episode highlights the advantage of patient, operationally engaged capital in tech-enabled industrial niches. For the industry, it shows that culture, ownership alignment, and selective M&A can outperform heavy leverage in young growth businesses.
About Private Equity Deals
Allocator and asset management expert, Ted Seides, conducts in-depth interviews with interviews with top institutional money managers across private markets. Guests include principals and senior leaders from private equity, private credit, real assets, and other alternatives. We dive deep into individual deals to learn about deal dynamics, companies, and ownership that make private equity a force in institutional portfolios and the global economy. Learn more and join our community at capitalallocators.com.