Private Equity
- Competence
- Transaction is within our area of competence
- Transaction is within our acceptable timeframe and reasonable execution risk
- Transaction Type
- Friendly public to private
- Private transaction
- Strategic investor deal
- No venture or “hot” auction
- Transaction Size
- EBITDA > US$2 million
- Enterprise Value = US$10 ~ 150 million
- Management
- Competent CEO
- Solid overall management team
- Management objectives consistent with ours
- Market Position
- Strong brand name
- Leading company in its niche market
- Demanding process of technology
- Strong customer loyalty and deep channel penetration
- Business Type
- Entry barriers
- Cost competitiveness
- Moderate rate of technological change
- Industrially focused
- Low event risk
- Valuation and IRR Characteristics
- Valuation conservative relative to peers
- IRR targets met without assuming multiple expansions, acquisitions or unit growth
- IRR targets met even in “flat EBITDA” case
- Degree of Control
- We can direct major decisions
- We can force an exit
- Adequate financial control systems
- Exit Alternatives
- Repatriation of capital through recapitalization and/or dividends
- Logical range of trade buyers or merger partners
- Put right to a strategic investor
- IPO alternative
