Target Company Overview

Hidden Harbor Capital Partners recently announced a strategic investment in Lathan Associates Architects, P.C., an established architectural and design services firm founded in 1990, with its headquarters in Hoover, Alabama. Lathan Architects specializes in providing architectural solutions tailored for K-12 and higher education institutions, as well as municipal clients across the state of Alabama. The Company has built a strong reputation for excellence and is led by founder Rick Lathan, who, along with his partners, will continue to play an active role in the business following this investment.

With over three decades of experience, Lathan Architects strives to meet the diverse needs of its clients by developing architectural designs that harmonize classic concepts with contemporary functionalities and environmental considerations. Their approach positions them as trusted advisors within the educational and municipal sectors in Alabama.

Industry Overview in Alabama

The architectural services industry in Alabama is experiencing significant growth, particularly in the education sector, as the demand for modern educational facilities continues to rise. The state's commitment to enhancing educational infrastructure has resulted in numerous projects aimed at improving both K-12 and higher education environments.

Additionally, Alabama's population growth and local government initiatives to revitalize communities have further propelled the demand for architectural design services. This momentum reflects a broader trend across the southern United States, as states allocate funding toward educational improvements and development projects.

Given this backdrop, firms like Lathan Architects are well-positioned to capitalize on the increased investment in educational and municipal construction projects. Their established relationships within the community and extensive experience allow them to effectively navigate the complexities of these developments.

Rationale Behind the Deal

The partnership between Hidden Harbor and Lathan Architects is rooted in a shared vision for growth and enhanced service delivery within Alabama’s educational sector. Hidden Harbor recognizes the Company's solid foundation and proven track record in delivering high-quality architectural services. The investment will enable Lathan Architects to expand its operations, enhance its service offerings, and leverage new market opportunities.

By aligning with Hidden Harbor, Lathan Architects aims to further strengthen its position as a market leader while ensuring it continues to meet the changing needs of its clients and communities effectively.

Investor Profile

Hidden Harbor Capital Partners is a private equity firm that focuses on investing in lower middle-market companies, with a management portfolio exceeding $1.9 billion. The firm emphasizes operational excellence and strategic growth, aiming to create value through closely collaborating with the companies it invests in. With its third fund currently operational, Hidden Harbor is equipped with $800 million to pursue additional growth opportunities across various sectors.

The firm operates with the belief that great companies are built on strong leadership teams, and it is dedicated to fostering long-term success through defined objectives and robust execution strategies.

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This investment represents a strategic move both for Hidden Harbor and Lathan Architects. Given the promising growth trajectory of the education sector in Alabama, aligning with a firm that has a robust operational focus positions Lathan Architects for significant expansion and increased visibility in the market.

Moreover, the fact that the founder and partners will remain involved suggests continuity and stability in leadership during this transition, which can be crucial for both employees and clients. This approach is likely to preserve the company's existing culture while also integrating new strategies for growth.

From an investment perspective, this partnership has the potential to yield positive outcomes, provided the firm continues to adapt to market demands and operationalize its growth strategies. The collaborative approach anticipated between Hidden Harbor and Lathan Architects is expected to create a pathway for sustained value creation.

Overall, this transaction appears to be a sound investment decision for both parties, with opportunities for leveraging existing strengths to capitalize on Alabama's burgeoning architectural services market.

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