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Investment Criteria

Cornerstone is focused on identifying attractive investment opportunities in niche manufacturing, distribution and service businesses that offer both operating stability and significant growth potential.

Transaction Situations

Corporate carve outs/divestitures

To date, Cornerstone has acquired 6 divisions of large / public corporations. We are therefore very experienced in working closely with the various personnel within a corporation to effect a smooth and efficient transaction. We structure Transition Service Agreements with the intention of minimizing the time period and required support needed while we extricate the business from its former corporate parent.

Private company sales

We believe the heart and soul of our nation’s economy is its entrepreneurial spirit and those business leaders who start and run their own companies. Cornerstone values the legacy and success of those businesses, and we seek out acquisition opportunities of such companies where we can carry on the momentum of a private owner while minimizing change and disruption.

Management buyouts

Often a change of business ownership begins with an executive or management team that desires to acquire and operate a business. Cornerstone looks to partner with experienced management in these types of situations to provide both capital and overall support to reach a successful purchase and post-closing transition.

Shareholder buyouts

When the timeframes and goals of multiple shareholders don’t align, Cornerstone can work with existing shareholders to purchase ownership from departing shareholders and allow for general management/ownership continuity.

Company Criteria

Revenues

Annual revenues ranging from $5 million to $100 million

 

Profitability

Adjusted operating profit ranging from $1 million to $10 million and EBIT margins of at least 10%

 

Capital Requirements

Prefer non-seasonal companies without excessive working capital needs relative to sales, as well as low-to-moderate annual capital expenditure requirements

 

Management

Partner with experienced management who will oversee day-to-day operation

 

Industry

Mature, non-cyclical, preferably fragmented with few dominant market leaders

 

Customer Concentration

Generally prefer companies where top customer does not account for more than 30% of revenues

 

Growth Potential

Business should have capacity for growth

If unsure as to whether an opportunity will fit our criteria, please contact us so that we may discuss the situation specifically.

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