We buy de-risked, contracted cash flows in the SDVOSB space.
Fabius Group acquires established service-disabled veteran-owned small businesses (SDVOSBs) in federal contracting: companies whose revenue is already under contract with the U.S. government. We buy in any industry, with a focus on businesses that serve the Department of Veterans Affairs, at disciplined prices, and we hold for the long term.
The thesis
Service-disabled veteran-owned federal contractors are among the most overlooked businesses in the lower middle market. Their revenue is contracted. Their customer is the federal government. Their founders are often ready to retire.
Yet very few buyers are positioned to acquire them. The businesses are too small for most private equity funds, and SDVOSB status depends on who owns the company, which narrows the field further. A small buyer universe means better prices, motivated sellers and less competition for each deal. That mismatch is the opportunity.
Why the VA
We are industry-agnostic. What we underwrite is the contract: who the customer is, how long the revenue runs and how likely it is to be renewed. On that measure, the Department of Veterans Affairs stands apart. Under its Veterans First Contracting Program (38 U.S.C. § 8127), the VA must consider service-disabled veteran-owned and veteran-owned businesses first, and it directs a larger share of its contracting dollars to them than any other federal agency.
That is where the set-aside work is, so that is where most of the businesses we want to own are. We will still look at an SDVOSB serving any agency, in any industry, as long as its cash flows are contracted and de-risked.
Why it works
- Low acquisition multiples. With a limited universe of buyers, we target purchase prices below 3x earnings.
- Short payback periods. We target payback in under two years. SBA 7(a) acquisition financing can cover up to 90% of total project cost for qualified buyers, so the equity required is small relative to the cash flow acquired.
- Contracted, creditworthy revenue. The customer is the U.S. government. Revenue sits under awarded contracts with defined periods of performance, and payment is governed by the Prompt Payment Act.
- Revenue we can verify before we buy. Federal award history is public. Contract values, periods of performance and recompete dates can be checked against FPDS and USAspending before diligence begins.
- Simple businesses with room to grow. Straightforward service operations, often run without a finance function or a business development plan. Professional financial management, new contract vehicles and new agency customers are clear paths to growth.
- Willing sellers. Many founders are approaching retirement and want a buyer who will keep the team, the customers and the mission intact. Seller financing keeps both sides aligned after close.
- Speed and certainty. Fabius Group is a single-member LLC owned 100% by its founder, Joe Bennett. There is no investment committee, no board and no syndicate to convene, so we can move quickly from first conversation to close.
- No fundraising. Fabius will fund future acquisitions with the cash flow available for distribution from the businesses it owns, alongside acquisition debt. That removes outside stakeholders and lets us structure each deal to fit the seller, whether a full buyout, a majority recapitalization, a seller note or an earnout, without external approval.
- Permanent capital, long-term hold. There is no fund life and no forced exit. The businesses we buy are built to be owned, not flipped.
- An owner who has done this before. Our founder, a former Marine Corps officer, has nine years of institutional finance experience, spanning investment banking at Barclays, infrastructure private equity and the investment team at Michael Milken’s family office, where he made private equity and private credit co-investments across sectors alongside blue-chip institutions.
What we look for
SDVOSB federal contractors
Established businesses performing on federal prime contracts or subcontracts.
Profitable and contracted
Positive cash flow with recurring revenue under awarded contracts.
Founder-led
Owners planning a sale, a retirement or a succession, on their timeline.
Any industry, VA first
Healthcare staffing, professional and technical services, facilities, construction or supply. The industry matters less than the contracts, and VA customers are the priority.
What we do not buy: venture-stage defense-technology companies, including drone startups. Those companies are clients of our advisory practice, which is run separately.
Thinking about what comes next for your business?
Every conversation is confidential. If you own a service-disabled veteran-owned federal contractor and are planning a sale, a retirement or a succession, we would like to hear from you.
Start a confidential conversation