Stability with opportunity
We look to acquire businesses that can create superior returns for all constituencies through revenue growth, operational efficiencies, scale, modest financial leverage, and improved management techniques. Typically, these means of creating value are not mutually exclusive; ideally more than one will apply to each investment.
We look for companies that afford management the ability to make few radical changes to the existing business in the first 12 to 18 months after the acquisition, opting instead to gain management familiarity. It is our belief that after becoming comfortable operating the business, management is in a better position to begin making changes as they see fit.
We target industries that are not subject to rapid technological change, are fairly easy to understand, and are in fragmented geographical or product markets. Within preferred industries, companies are targeted based on sustainable market position, history of positive, stable cash flows, and opportunities for improvement and growth. We prefer healthy, profitable companies with a proven second-tier management team.