Universal Criteria |
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To consider a company as an investment candidate, we/management must be able to add value to the business going forward. |
| Industries |
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Wide variety of manufacturing and service-based industries/businesses. |
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Companies in fragmented industries are of interest. |
| Revenues |
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Platform acquisitions: Mature companies and corporate orphans with established historical revenues between $50 million and $1 billion +/-. |
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Add-on acquisitions: Size is not relevant but generally $25 million and greater is preferred. |
| Earnings |
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No minimum or maximum earnings/EBIT. |
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We prefer companies with good/positive cash flows. |
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However, we have also acquired unprofitable companies and will work to understand why a business may be losing money without being discouraged. |
| In addition to Strong Performers, we also consider Underperforming Companies. |
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An under performing company may contain some or all of the following characteristics: |
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Future improvements and new business practices can yield substantial value; |
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Absence of a management leader or gaps in management team; |
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Liquidity-constrained balance sheet; |
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Opportunities for cost reduction; |
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Opportunities for inventory reduction and working capital improvement; |
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Opportunities for customer service level and lead-time improvement; and |
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Opportunities to capitalize on the product position and generate annual revenue gains even in industries that are growing at modest rates. |