Teamshares (TMS) investor relations material

Business model and acquisition strategy

• Focuses on acquiring $500,000–$5 million EBITDA, high free cash flow businesses from retiring owners, aiming for permanent ownership and employee stock incentives.

• Utilizes a programmatic, industry-agnostic approach, targeting a vast market of small businesses, with over 90 acquisitions to date.

• Employs rigorous in-house due diligence, including financial, legal, and operational assessments, with a typical acquisition process lasting four to six months.

• Leverages proprietary technology (Teamshares OS) for financial consolidation, analytics, and centralized cash management, enhancing scalability and operational oversight.

• Differentiates from traditional roll-ups by focusing on cross-industry diversification, permanent ownership, and leadership succession for retiring founders.

Financial performance and growth outlook

• Achieved significant EBITDA growth, from nearly $20 million last year to a projected $60 million this year, primarily through acquisitions.

• Operating leverage has improved, with segment EBITDA exceeding $60 million and corporate EBITDA over $20 million on a run-rate basis.

• Expects to reach positive levered free cash flow in 2027, with a gradual move toward self-funding acquisitions as cost of capital declines.

• Margin expansion is driven by tech-enabled processes and centralized cash redeployment to high-IRR opportunities.

• Cost of capital is expected to decrease as the company matures and achieves its EBITDA projections.

Risk management and operational discipline

• Maintains a low annual impaired capital rate (~2%), which has declined due to improved underwriting criteria.

• Targets businesses with low customer concentration, low technology risk, and long operating histories to minimize key person and market risks.

• Avoids regulated or litigation-prone industries, focusing on simple, evergreen businesses.

• Employee ownership at the subsidiary level aligns incentives and supports business growth.

• High LOI-to-close conversion rate (80%+), with sellers attracted by the promise of permanent ownership and employee participation.