Zabel Companies Research
CRITICAL NOTE: Firm Classification
Zabel Companies is a private equity firm, not an M&A advisory firm. This firm is a buyer of companies, not an advisor to sellers. Business owners seeking representation to sell their business should engage an M&A advisor, not Zabel Companies. However, Zabel represents a potential exit partner for business owners seeking recapitalization or partial liquidity.
Investment Approach
Zabel Companies is a private investment firm dedicated to partnering with management teams to invest in and build privately held companies over the long term (5 to 15 years). The firm brings a patient and flexible approach to investing, working closely with management to steadily grow businesses and build value for all parties involved. Unlike traditional private equity firms that may pursue quick flips or financial engineering, Zabel emphasizes partnership continuity and operational value creation.
The firm's investment philosophy centers on three core principles: partnership, patience, and experience. Zabel allocates more time to providing resources and support to management team partners, maintaining an appropriate number of investments to ensure they know their companies well, make decisions faster, and build stronger relationships. They have never exited an investment due to pre-determined investment periods dictated by partnership agreements, allowing for true long-term value building.
Sector Focus
Zabel invests exclusively in commercial and industrial products and services companies in situations where there is a strong fit with management and opportunities to grow a business. Their investment focus spans two primary categories:
Commercial and Industrial Products: Investing in light manufacturers, value-added distributors, and assembly/kitting businesses serving commercial and industrial end markets. Targeted sub-sectors include industrial safety, aftermarket replacement parts, specialty packaging, water and wastewater products and solutions, and specialty chemicals.
B2B Services: Investing in providers of business services and outsourced solutions to commercial and industrial end markets. Targeted sub-sectors include environmental services, facility services, testing, inspection and certification, industrial MRO, and water and wastewater services.
Investment Track Record
Zabel has been investing in the lower middle market since 1999, with over 75 years of combined team experience. The firm has completed numerous platform acquisitions and add-on acquisitions across their targeted sectors. Notable investments include:
Recent Transactions (2024):
- Golden Ceramic Dental Lab (September 2024): Recapitalization of a full-service dental laboratory manufacturing custom dental prosthetic appliances for dental support organizations, group practices, and independent dentists nationwide
- SVI International (March 2024): Acquisition of the leading supplier of aftermarket repair parts and accessories for automotive lifts, wheel service, and automotive shop equipment
Historical Portfolio:
- Stan's NoTubes (July 2022): Investment in the leading player in tubeless technology for bicycles, with global distribution in nearly seventy countries
- Frame It Easy (April 2022): Acquisition of an online, tech-enabled manufacturer of custom frames receiving orders through website and Amazon
- Bedford Precision Parts (April 2019): Acquisition of a leading distributor and assembler of replacement parts, accessories, and kits for the spraying equipment industry
- Medical Packaging Inc. (August 2020): Acquisition of a leading manufacturer of unit dose medication and pharmaceutical packaging and labeling systems
- New Market Waste Solutions: Refuse and recycling consulting and management services company (exited January 2023 to Waste Harmonics)
- Puritan Products: Manufacturer of high purity, custom-blended and specialty chemicals (exited April 2017 to Avantor)
The firm has been recognized by Inc. magazine as a Founder-Friendly Investor for three consecutive years (2022, 2023, 2024), a distinction based on surveys of entrepreneurs who have sold to private equity firms.
Investment Criteria & Process
Zabel targets private businesses with EBITDA or cash flow greater than $3.0 million and less than $8.0 million, though they have shown flexibility in evaluating opportunities both below and above this range. The firm prefers to invest in transactions where there is management team continuity, though they can accommodate management transitions within reasonable timeframes.
Business Characteristics: Zabel seeks companies with management teams interested in ownership, high quality product or service offerings, opportunities for growth, long-standing and diverse customer relationships, and strong positions within their industries.
Geographic Focus: United States
Transaction Types: Buyouts, recapitalizations, and growth capital investments
The firm provides liquidity for existing shareholders, capital and resources for growth, and ownership opportunities for management team members. They do not rely on financial engineering to drive value creation, instead focusing on partnerships with management, long-term planning, and sound operational execution.
Team & Organization
Zabel's investment team consists of six professionals with deep experience in lower middle market investing:
Senior Leadership:
- Bill Lunsford, Managing Partner: Has been investing in lower middle market companies since 1999. Prior experience includes international corporate finance work and operating an environmental services company. Industry experience spans waste services, specialty chemicals, replacement parts, financial services, optical components, and more.
- Rich Jones, Partner: Has been working with Bill and partnering with lower middle market companies for sixteen years. Prior experience includes advisory work with a middle market investment bank and a global corporate finance and brand valuation consulting firm. Currently serves on the Board of Governors of M&A Source.
Investment Team:
- Brian Miskell, Vice President: Joined Zabel from CapitalWorks, a Cleveland-based private equity firm. Prior experience at Worthington Industries where he worked on M&A and operational improvement initiatives.
- Lisa Foster, Assistant Vice President & Controller: Former AVP of Accounting/Controller at Aramark Healthcare Technologies, with extensive corporate finance experience.
- Tanner Williams, Senior Associate: Former Associate at Fidus Capital, a Business Development Company providing capital to lower middle market companies.
- Paolo Dionisio, Associate: Former Analyst at SharpVue Capital, a private investment firm and Small Business Investment Company.
The firm maintains a lean organizational structure, enabling hands-on partnership with portfolio companies while providing the resources and expertise needed for growth.
Competitive Positioning
Zabel differentiates itself from other lower middle market private equity firms through several key factors:
Patient Capital: The firm takes a steady and measured approach to building businesses over the long-term, never exiting investments due to pre-determined investment periods. This approach allows management teams to focus on long-term value creation rather than short-term metrics.
Lower Middle Market Expertise: With seventy-five-plus years of collective experience working exclusively with lower middle market companies, the team understands the nuances, opportunities, and unique challenges often present in family businesses and private companies.
Partnership Track Record: The firm's success is measured not just by financial returns but by the quality and effectiveness of their partnerships. They encourage prospective partners to contact existing and past management teams to understand their commitment and approach.
Conservative Capital Structure: Zabel does not rely on excessive debt or financial engineering. They determine the appropriate amount of debt for a business in partnership with management, rather than letting the market dictate leverage levels. The firm reports never having lost a penny of bank debt.
Selective Portfolio Management: By maintaining an appropriate number of investments, Zabel ensures they have the time to invest in their partnerships, know their companies better, make decisions faster, and identify more opportunities to enhance value.
Not a Fit If
Zabel typically declines opportunities that don't align with their partnership philosophy or sector focus:
- Businesses outside their targeted commercial and industrial products and services sectors
- Companies seeking quick exits or financial engineering-driven strategies
- Situations requiring aggressive leverage or financial engineering
- Management transitions that don't allow for reasonable continuity
- Businesses lacking strong management teams or clear growth opportunities
- Companies outside their EBITDA range without compelling strategic rationale
Geographic Coverage
Based in Charlotte, North Carolina, Zabel invests exclusively in United States-based businesses. The firm's portfolio companies span multiple states including Illinois, New York, Connecticut, Pennsylvania, North Carolina, and California.
Regulatory Status
Zabel Companies, LLC is registered with the SEC as an exempt reporting investment adviser. The firm is not a FINRA-registered broker-dealer, which is typical for private equity firms.