Initech Capital A5 - Implementation Plan

All Systems Connected

A5 Staged Distribution Platform: Implementation Plan

Initech Capital · DEC-ICAP-2026-01 · IC decision Dec 15, 2026 · Month-12 gate Jun 30, 2028

fact_check

Frame & IC Decision

Frame the thesis, screen targets, and plan capacity so the Investment Committee can approve A5 with conditions on Dec 15, 2026.

Q4 2026
Frame
Dec 15
IC Decision
timeline Implementation Timeline
Oct
Thesis
Nov
Screen
Early Dec
Cases
Dec 15
Decide
$200M
Envelope
6
Alternatives
76.2
A5 Score

Decision Steps

assessment
Thesis and Criteria Confirm the $8M–$25M EBITDA mandate and seven weighted criteria. Owner: Managing Director, Initech Capital.
account_tree
Alternatives A1–A6 Comparable cases for all six alternatives, with code-named targets (Magnolia, Cumberland, Tombigbee). Owner: Initech Capital Deal Team.
rule
Capacity Stress Test One new platform before the gate; max three concurrent integrations. A5 holds; A2 fails. Owners: CFIO and Operating Partner.
gavel
IC Approval (MS-01) IC approves A5 through the month-12 gate with a $110M pre-gate cap and records conditions and dissent.
groups

Source, LOI & Diligence

Sign an LOI for Project Magnolia by Mar 31, 2027, then complete QoE, legal, environmental, and culture diligence by May 28, 2027.

$11.5M
Magnolia EBITDA
9.1x
Entry Multiple
timeline Implementation Timeline
Jan
Outreach
Mar 31
LOI
Apr
Diligence
May 28
QoE
≥$10.5M
QoE EBITDA Floor
≤3.0x
Leverage at Close
$110M
Pre-Gate Cap

Approval Conditions and Owners

timer
Magnolia LOI (MS-02, Mar 31, 2027) Signed LOI for the Southeast specialty MRO distributor at or below the walk-away price. Owner: Managing Director, Initech Capital.
verified_user
QoE Confirms ≥$10.5M (MS-03, May 28, 2027) Third-party quality of earnings confirms adjusted EBITDA and sets the working-capital peg. Owner: Finance.
policy
Legal and Environmental Diligence (May 28, 2027) Clean legal and environmental findings; any material finding reopens the decision. Owner: Chief Legal Officer.
savings
Pre-Gate Spend Cap (Ongoing) Pre-gate spend capped at $110M. Owner: Finance.
hub

Dependencies & Constraints

A5 must run beside the Initrode Canada integration tail and inside deal-team capacity. Either can reopen the decision.

5 of 6
Deal Team Committed
≤3
Concurrent Integrations
timeline Implementation Timeline
Q4 26
Plan
Q1 27
LOI
Q1 27
Initrode Tail Ends
Q2 27
Close
83%
Deal Team Util.
80%
Op. Partner Util.
≤3.0x
Leverage

Dependencies to Manage

engineering
Initrode Canada Integration Tail (through Q1 2027) Operating Partners have 4 of 5 FTE committed. A5 holds under this load; A2 does not. Owner: Operating Partner, Integration.
policy
Close Conditions (Jun 30, 2027) Retention agreements for the top 12 managers, R&W coverage, and leverage ≤3.0x at close. Owners: HR & Talent, Chief Legal Officer, CFIO.
handshake
A1 in Parallel Runner-up A1 keeps two Initrode add-ons in diligence; Project Cumberland term sheet by Mar 31, 2027. Owner: Managing Director, Initech Capital.
warning
Reopen Triggers Magnolia QoE EBITDA under $10M (MD), envelope cut above 20% or rates +100 bps (CFIO), or a material legal or environmental finding (CLO).
event

Close & 100-Day Plan

Close Project Magnolia on Jun 30, 2027, then deliver the 100-day integration plan by Oct 8, 2027.

Jun 30
Close (MS-04)
Oct 8
100-Day Plan (MS-05)
timeline Implementation Timeline
Jun 30
Close
Jul
Finance
Sep
Pricing
Oct 8
ERP
≥90%
Milestones On Time
≥90%
Key-Employee Retention
≥95%
Customer Retention

Integration Workstreams

insights
Finance Integration (Aug 2027) Monthly close, reporting package, and cash management. Owner: Corporate Finance.
query_stats
Pricing Excellence (Sep 2027) Price waterfall and margin leakage fixes; gross margin from 31.0% toward 32.5%. Owner: Operating Partner.
calculate
ERP & IT Integration (Oct 2027) ERP migration and cybersecurity baseline. Owner: IT & ERP Integration.
inventory
Talent & Culture (Jul 2027) Retention agreements and Initech values onboarding. Owner: HR & Talent.
call_split

Month-12 Gate: Scale, Revise, Partner, or Hold

Written rules set the call before results arrive. The IC decides scale, revise, partner, or hold on Jun 30, 2028.

6
Scale Rules
3
Hold Triggers
timeline Implementation Timeline
Q2 28
Gate
Q3 28
Scale
Q1 29
Add-ons
Q2 29
Review
<85%
Hold: EBITDA vs Plan
≥95%
Scale: EBITDA vs Plan
≤105%
Spend vs Cap

Gate Rules

cancel
Hold / Stop EBITDA below 85% of plan, key-employee retention below 80%, or net leverage above 3.5x.
trending_up
Scale EBITDA ≥95% of plan, milestones ≥90% on time, key-employee retention ≥90%, customer retention ≥95%, leverage ≤3.0x, spend ≤105% of cap.
swap_horiz
Revise or Partner Revise if EBITDA is 85–95% of plan with a fix inside one quarter; bring in a co-investor if the add-on pipeline exceeds capacity.
help_outline
What Would Change the Decision A Magnolia QoE miss, a culture misfit flagged in diligence, or a second platform opportunity that requires an explicit IC trade-off.