Prisoner's Dilemma: Capex Edition

Happy Wednesday, folks!

Thanks for joining us for another edition of Atlasview Insights. We use this newsletter to share our strategies, philosophies, experiences, and lessons we’ve learned along the way. Small bite-sized insights for business owners, dealmakers, and investors.

In this newsletter, we cover: 

• Have An Opportunity For Us?

• Prisoner’s Dilemma: Capex Edition

• Atlasview Featured in Axial’s Mid-Year Pulse Check

• ICYMI - Popular Previous Issues

• Our Deal Process

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Before we jump into this issue, a quick reminder: Atlasview Equity Partners is a private equity firm that acquires and builds B2B businesses in the lower middle market. For platform investments, we look for:

• Business Model: software, business services, value-added distributors

• Business Size: minimum $1.5m EBITDA or $10m revenue

• Business Profile: sticky B2B customer base

• Business HQ: US & Canada

For add-on acquisitions for our portfolio companies, we have no size/geography criteria. We’re seeking add-ons in the library, archive, legal, and government niches for our portco Soutron Global and HVAC distributors for our portco PureFilters.

Whether you’re a business owner interested in working with us or an intermediary with a deal to share, always feel free to contact us!

One of the most powerful investing frameworks is capital cycle theory, which explains how industries swing between periods of under- and over-investment.

When an industry experiences an influx of capital, companies feel pressure to spend aggressively on new capacity or capabilities. Incumbents, fearing loss of market share, match each other’s spending.

The result: discretionary growth capex (originally intended to attract new customers) morphs into mandatory maintenance capex (required just to retain existing ones). Ultimately, this erodes investor returns.

We’ve seen this dynamic play out time and again across several industries, particularly technology and the physical infrastructure that powers it. Examples include

• Escalating R&D spend on new software features and functionalities

• The bar for AI computing power accelerating

• Data center capacity continually increasing

• Telecom infrastructure going through frequent upgrades

The key insight: when everyone invests heavily at the same time, investors lose.

For investors, the lesson is twofold:

1. Be wary of industries recently flush with capital — they often signal future poor returns.

2. Favour businesses where growth capex is truly discretionary, not the bare minimum required to maintain competitiveness.

At Atlasview, we seek out companies operating in industries or niches that have avoided massive inflows of institutional capital—businesses better positioned to sustain attractive returns over the long run.

Our Principal, Ryan Khan, was featured in Axial’s Mid-Year Pulse Check. Axial conducted a sentiment survey among ~40 active dealmakers from both the buy side and the sell side. The survey revealed a cautiously optimistic tone.

Check out the full article and survey results here: https://www.axial.net/forum/mid-year-pulse-check-lmm-dealmakers-weigh-in-on-2h-2025/

Here are some of our previous popular issues:

Atlasview-Backed Soutron Global Completes Take Private of Auto-Graphics

·

March 31, 2025

Agent Information Software, Inc. (OTCPK: AIFS), parent company of Auto-Graphics, Inc. (“Auto-Graphics”), a pioneer in State Interlibrary Loan (ILL) software systems, announced today that it has been acquired by Soutron Global, a portfolio company of Atlasview Equity Partners & Bloom Equity Partners.

Large TAMs Are Overrated

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June 25, 2025

One of the most overrated metrics is Total Addressable Market (TAM). Large TAMs have established competitors, are saturated with capital, and have a constant supply of new entrants. This results in low returns on invested capital for most businesses in the market.

Evaluating Pricing Power

·

May 28, 2025

At Atlasview, we highly value businesses that can consistently raise prices without losing customers. Pricing power is a critical indicator we assess when evaluating new investment opportunities. We often find that many businesses, particularly owner-operated ones, haven’t priced their products/services to reflect their true value.

We pride ourselves on having a simple and transparent process. Our streamlined process enables us to move quickly to get you answers fast.

• Step 1: Contact Us

• Step 2: Execute NDA & Schedule Call

• Step 3: Receive Offer & High-Level Terms​

• Step 4: Execute LOI & Complete DD

• Step 5: Close Deal & Receive The Cash

• Step 6: The Fun Part Begins!

Whether you’re a business owner interested in working with us, or an intermediary with a deal to share, always feel free to contact us!

Schedule Intro Call

Atlasview Equity Partners is a founder-first private equity firm specializing in acquiring and building businesses in the lower middle market. Atlasview seeks businesses with defensible moats and multiple levers to add significant value to create an asymmetric returns profile. Atlasview works closely with management teams to execute organic and inorganic (M&A) growth initiatives to build businesses into market leaders.