CHB Capital Partners

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Fall 1997

Unfortunately, we have not been able to find a picture of a one-armed paper hanger, so the graphic above will have to suffice in describing just how busy we’ve been since our last newsletter. In September we closed two investments in the same week, an experience that we hope does not repeat itself soon.

In our third investment, the fund invested $4.8 million alongside management to purchase Champion Technologies, Inc. from its corporate owners. CTI manufactures quartz crystal oscillators for telecommunications applications. The majority of its products go into the cellular market as frequency control devices for base stations and microwave radios. CTI has a strong position with a who’s who list of telecom companies and will focus its efforts on broadening its product line to gain a larger share of its customers’ frequency control component purchases.

In our fourth investment, the fund put $2.5 million (with a one year option to invest an additional $2.0 million) in growth equity into Spyder Active Sports, Inc. The company designs and markets high performance ski wear. They sponsor the US Ski Team and provide the distinctive spider web patterned skin suits that the racers wear in addition to great technically oriented ski wear for the rest of us. Spyder has never advertised and David Jacobs, the company’s founder, believes that substantial untapped growth potential exists worldwide for their apparel. The investment will fund increased sales and marketing efforts as well as enable management to streamline the company’s manufacturing and distribution structures.

Trussway and SCOA continue to do well. We have signed a letter of intent for our first acquisition for Trussway which will bring both a new product line and a new geography to the company. SCOA has had good success adding new chains while maintaining comp store gains that are among the highest in the shoe business. They are also evaluating an acquisition. Each of these acquisitions feels like a new deal for us given our level of involvement and helps to explain why we haven’t been in the office much this Fall.

Lastly, with all of this investing activity comes the inevitable dwindling of our war chest. We have sufficient capital for 1 - 2 more investments and given the opportunities we are now looking at have decided to start raising new capital. We expect to generate sufficient interest among our current investors and a few others with whom we have kept contact to make the process relatively painless.

We encourage you to call us with interesting investment opportunities within the closely-held and family owned business market. We look for transactions where we can invest $2 million to $10 million in equity capital in established companies with $25 million or more in revenue. Should you call, we guarantee you a thoughtful and timely response.

Best regards,
Tad Kelly, John Flanigan & Blake Morris


511 Sixteenth Street, Suite 600 Denver, CO 80202
Telephone: (303) 571-0100 Facsimile: (303) 571-0114