Investment criteria
What we look for, stated plainly.
What we look for, written plainly enough that an owner or an adviser can judge fit in a couple of minutes.
Geography
Initial focus on United Kingdom businesses.
We acquire companies that trade in the United Kingdom, wherever in the country they are based. Location within the UK is not a filter: a business on an industrial estate outside Wakefield is as interesting to us as one in the South East.
International customers and overseas suppliers are common in the companies we look at and are not an obstacle. Our initial focus simply means the operating business itself is British.
Business type
Established operating businesses, not pre-revenue startups.
We buy companies that already work: real customers, real revenue, a trading history long enough to tell the difference between a good year and a good business, and earnings that do not depend on a forecast.
We do not invest in pre-revenue ventures, concepts, or businesses whose value rests on a product that has yet to be sold. There is nothing wrong with that kind of risk; it is simply not what we do.
Characteristics
What a good fit usually looks like.
- Proven demand
- Customers buy today, for reasons that do not need explaining.
- Established customer base
- Relationships that predate the current year's sales effort.
- Positive underlying economics
- The business makes money doing the work it actually does.
- Strong market reputation
- The name means something to customers, staff and suppliers.
- Recurring or repeat business
- Contracts, service intervals or habitual reordering.
- Operational improvement available
- Processes and reporting that would benefit from investment.
- Technology adoption available
- Work still done by hand that modern systems would carry.
- Growth potential
- Capacity, geography or product headroom left unused.
- Succession requirements
- An owner planning what happens next, with no obvious successor.
Financial parameters
We have not published financial parameters. If your business is established and profitable, the quickest way to establish fit is a short confidential conversation.
Not every good business fits a printed list. If yours is close, talk to us.
Sector
We are sector-agnostic.
We are interested in the quality of a business rather than the fashionability of its industry. Manufacturing, distribution, engineering, specialist services, maintenance, testing, healthcare supply: the question is whether the company is good, not whether the sector is in favour.
We avoid businesses whose economics depend on a single contract we could lose, on regulation we cannot read, or on the owner personally being the product.