Company

We create value for our investors with the objective of delivering a Net IRR on the funds under our management in the top-quartile of the industry.

Prudent has close relationships with other major financial groups including the large global banks, family investment offices, real estate investment trusts, and corporate investment funds.

In addition to portfolio company value creation, we also see opportunities for further value enhancement along the entire acquisition process, from sourcing to exit.

Acquisition Process

–Deal Flow

Through our extensive network of contacts worldwide, we are exceptionally well positioned to identify excellent investment opportunities, in particular those that are brought to us by our industry peers (i.e. secondary buyouts) and major corporations with whom we have established a long-standing relationship (i.e. corporate divestitures).

–Investment Strategy And Criteria

With our industry and operation expertise, we are able to screen viable targets early on in the acquisition process. We rely on our informal network of contacts as much as we rigorously apply our investment criteria in selecting our investments.

–Due Diligence

We follow a thorough due diligence process which comprises:

• –a comprehensive review of all legal, contractual, accounting, tax and transactional issues with a view to identify and assess the impact of all categories of risks on the valuation of the target company.
• –an operational due diligence that addresses all strategic, commercial, operational, and financial issues. We look in particular in to the following areas.the development of a post-acquisition integration plan under various scenarios including a worse-case scenario
  •           –financial analysis of the target company
  •           –analysis of result areas (products, markets, customers, end-users, channels
  •           –review of products, services, technologies, and operations against those of competitor’s along the entire economic process
  •           –assessment of management team
• —an analysis of potential exit strategies, whether in the form of an IPO, a trade sale, or a refinancing, that addresses potential pricing issues, costs and market conditions and their impact on the realization of value within 4-7 years from the date of investment

–Deal Structure

We aim to ensure that the acquisition agreement contains the following guarantees and protections for our firm.

• –appropriate transaction price performance milestones
• –an active board role for the firm consistent with its controlling equity stake in the portfolio company
• –significant shareholder rights and protections
• –mechanisms for protecting and/or enhancing the firm’s investment including the possibility of preferred shares, convertible debt, options, warrants and other forms of equity stakes
• –provision for staggered investments tying successive fund commitments to performance milestones

We intend to play a pro-active role as Board Members of our portfolio companies, working closely with the management teams in the following areas.

–Corporate Governance

• –Board nomination and role definition
• –Clear role split between Prudent Board Members and Portfolio Company Management Team

–Value Creation

• –Formulation of Strategic Plan and post-acquisition integration plan
• –Identification of sources of growth in terms of products, markets, and technology
• –Recruitment of key staff
• –Evaluation of acquisitions, as part of a build-up strategy
• –Operational improvement
• –Risk management
• –Redesign of business model and customer value propositions
• –Leveraging of the partner’s extensive network of professional and commercial contacts
• –Potential for significance aftermarket growth
• –Excellent growth prospects in both domestic and foreign markets, achievable organically or through acquisitions
• –Significant potential for operational improvement

–Exit

• –Profitable exit opportunity within 4-7 years from the date of investment

Financial Criteria

• –Sustainable and stable free cash flows
• –Strong gross margins
• –Good profitability as evidenced by positive EBITDA
• –Strong revenue and earnings growth
• –Return on equity of at least 15% per annum over 10 year period (5 years backward and 5 years forward)
• –A strong balance sheet with potential for further asset value enhancement

Geography – Global

Sectors

We focus on a few sectors where we can leverage our deep industry knowledge an extensive operational experience in growing and building successful businesses, large and small. We concentrate on but do not limit ourselves to the following industry sectors:

• –Real Estate
• –Food and Agricultural Commodities
• –Materials (including chemicals)
• –Health
• –Energy
• –Financial Services, notably Emerging Financial Institutions

Transaction Types

We take controlling positions, either as a stand-alone or co-investor with other partners. We engage in all major transaction types, notably:

• –Buyouts and buy-ins
• –Corporate divestiture
• –Public to private transactions