Investeco believes that it enjoys a competitive

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Unformatted text preview: nvironmental engineering Environmental laboratory testing/analytical services Pollution/ GHG monitoring Recycling processes/technologies/services Site and soil remediation/spill and landfill control products Automotive technologies Composting systems/components Solar-photovoltaic/thermal technologies and products Other Sectors The Partnership may target other sectors and segments that have environmental drivers and that the General Partner believes share many of the key criteria of the Environmental Sectors. ACQUISITION PROCESS Proprietary Deal Flow Through Investeco’s dealings in connection with Fund I and Fund II, and its contacts with industry professionals, it has built channels for proprietary deal flow within the Environmental Sectors. Investeco believes that it enjoys a competitive advantage as a result of these proprietary deal flow channels. Investment Criteria The General Partner intends that approximately 95% of the Partnerships’ resources will be applied to investments of up to approximately $15 million in “expansion stage” private companies (including follow-on investments). The General Partner intends that these investments will generally be made in Canadian-based companies (although US-based companies will be considered) which the General Partner believes to have established revenues, good management and long term competitive advantages, as well as the prospect of providing a profitable exit opportunity within 4 to 7 years from the date of initial investment. Although the Partnership will have a preference for profitable companies, it may also invest in companies that are not yet profitable. The General Partner further intends that up to approximately 5% of the Partnerships’ resources will be applied to investments of between approximately $250,000 and $1 million in “seed stage” private companies. The General Partner expects that these investments will generally be made in Canadian based companies (although US-based companies will be considered) that the General Partner believes to have excellent growth prospects - 10 - and management, and which the General Partner believes can provide a profitable exit opportunity within 4 to 7 years from the date of investment. Perform Extensive Due Diligence Financial Analysis of the Proposed Investee Company Investeco will analyze whether the company appears to exhibit certain of the following characteristics: • • • • • • • • • Profitability, as evidenced by positive EBITDA; Strong revenue and earning growth; Strong and steady cash flow streams; Profit margins that are higher than those of its competitors; Improving margins; A strong balance sheet; An established operating history; Attractive valuations; and Suitability for the public markets or other exit strategies. Analysis of Products, Services, Technologies, and Operations Investeco looks for certain of the following criteria: • • • • • • • • Quality, unique, differentiated and distinct products, services and/or technologies that the General Partner believes can provide a long-term competitive advantage; Strong and clear demand for such products, services and/or technologies; Competition on the basis of value, rather than cost alone; Strong brands and marketability; Not selling on environmental merits alone; Access to appropriate distribution channels; Quality operating procedures and processes; and Scalability of operations and a potential for a large market. Analysis of Management Team Investeco will examine the quality of the management team based on certain of the following criteria: • • • • • • • • • Track record, industry experience and the ability to take the company forward; Clear and compelling vision, goals and strategies; Past success in building and growing companies; An entrepreneurial CEO who is committed to staying with the company; Strong leadership, problem solving, and decision making abilities; Trustworthy management who appear to work in an open and transparent manner; Solid financial management and a capable CFO; Ability to identify challenges and deal with adversity; and Quality directors and advisors. Analysis of Potential Exit Strategies Investeco will examine the potential for a successful realization of value within 4 to 7 years of the investment, taking into account the potential for each of the following strategies, given potential pricing issues, costs, and market conditions: • Public offering; - 11 - • • • • Refinancing; Sale or merger; Sale back to the investee company or its management; or the splitting of a company into groups of assets more suitable for sale to particular buyers. Create the Right Deal Structure and Transaction Process In concluding an investment transaction, Investeco will seek to achieve maximum flexibility and control, and to ensure that it has a significant involvement in the management of the company going forward in relation to the Partnership’s ownership stake. Some of the features that the General Partner may seek to achieve in a transaction include: • • • • Staggered investments tied to clear performance benchmarks for the company; An active board of direct...
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This document was uploaded on 02/19/2014.

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