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We seek to partner with management teams to acquire manufacturing,
distribution and service companies with revenues of $5-40
million, with profitability preferred but not required. We
will consider most industries, (excluding real estate, financial
services, and retailing) but prefer companies with an industrial
or commercial market orientation. Transaction value ranges
between $3 and $25 million. Sandhurst takes pride in being
able to move quickly on attractive opportunities.
Unlike most private equity firms, we are willing to consider
out-of-favor industries, underperforming companies, or companies
in transition. We recognize that in many situations, particularly
during times of financial distress, recent profitability is
not reflective of normalized earnings.
Targets
Specifically, we are pursuing the following:
- Management buyouts
- Divestitures
- Turnarounds
- Recapitalizations
The majority of our opportunities come from one of the following:
- A parent company seeking to spin of a non-core division,
product line, subsidiary or other business
- An owner seeking liquidity but lacking a succession plan
In all instances, we are interested in companies that exhibit
attractive fundamentals. Desirable investment characteristics
of a potential acquisition include:
- Companies that are well positioned to become a platform
for tuck-in acquisitions of similar or complementary companies
- Companies operating in fragmented industries
- Companies with a competitive and defensible market position
in their niche with a visible potential to become a leader
in that industry
- Longstanding and stable customer relationships
- Modest working capital and fixed asset requirements
Sandhurst Approach
We look to acquire businesses at reasonable multiples of trailing
operating earnings. Ideally, we are interested in situations
where we can provide additional financial, operational and
strategic resources. We prefer transactions in which management
teams want to remain with the business and value the opportunity
to earn a significant equity-like stake in their company.
Sandhurst will entertain a wide variety of transaction structures
to satisfy the needs of selling shareholders and management.
Notwithstanding the above, our investment horizon is long
term, and our transactions must employ a sensible and reasonable
capital structure, one that addresses the company's growth
initiatives while providing a comfortable operating cushion
to accommodate fluctuations in performance.
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