AMCG will initially evaluate a
potential investee based on following screening
criteria:
|
Positive Criteria |
Negative Criteria |
Size of Company: |
Approx. US$100 to US$500 million+ enterprise value |
Smaller than US$50 million enterprise value |
Size of Investment: |
US$15 to US$50 million +; Up to US$200 million with others |
Less than US$10 million |
Size of Equity Ownership: |
5% to 20% |
More than 25% |
Management Team: |
Experienced with significant ownership stake |
Inexperienced/Little ownership in business |
Corporate Governance: |
Must be key priority of management |
Not important/less important to management |
Market Position of Investee: |
Defensible market position with strong growth opportunities; must have identifiable competitive advantage |
Weak market position or strong position in commodity business; no identifiable competitive advantage |
Cash Flow Characteristics: |
Sound basis for expected stable cash flows |
More cyclical cash flow history, little historical information |
Stage: |
Strategic development; expansion, acquisition, merger, restructuring, recapitalization, buyout |
Start-ups; new, unproven products, services or technologies |
Security Requirements: |
Reasonable asset coverage; second lien on fixed assets; pledge of shares |
None |
Debt Service: |
Debt service capacity projected to enable amortization of total debt over 5 to 8 year period with grace period |
Little ability to service debt; need for high component of PIK interest |
Investment Exit: |
Number of potential exits from equity position, including: IPO, trade sale, other sale, recapitalization/refinancing, contractual agreement with shareholders |
Only one viable exit |
Preferred Industries/Sectors: |
Less cyclical with proven technologies and moderate to high returns on capital, including, but not limited to:
Infrastructure-related: electric power, transportation, water treatment and environmental protection services
Healthcare services
Business services
Education services
Consumer products
Financial services
Media and publishing
Niche manufacturing |
More cyclical with some technology risk and/or lower returns on capital, including, but not limited to:
Heavy equipment
Commodity retail
Biotechnology
Traditional distribution (lower value-added)
Agriculture
Transportation equipment
Airlines
Natural resources
Commodity industries (i.e., steel, petrochemical, cement)
Most types of real estate |
