The Acquisition Process
Evaluation of opportunities
When considering investment opportunities, our team rigorously evaluates the business, including its operations, markets, management, history and prospects. Keeping the entire team involved throughout the process allows us to move quickly and compresses the decision-making process. Considerable time and effort is devoted to becoming closely acquainted with management in order to assess each manager’s capabilities and goals.
As needed, we enlist the assistance of third-party partners in such areas as strategic consulting projects, quality of earnings determinations, and organizational assessments. We maintain close relationships and have a long history of working with these carefully selected partners, which allows us to draw on their most qualified professionals. Together, we work in a disciplined, efficient manner throughout the due diligence process.
During the evaluation process, our team also engages in structuring the transaction, including valuing the enterprise, negotiating with the seller, and financing the transaction.
NSCP usually arranges financing by accessing its network of senior and subordinated lenders including, where appropriate, our limited partners. Generally, these lenders have been involved with previous NSCP transactions and are familiar with our personnel, track record, and the way we work with our companies.
Consistent with NSCP’s belief in the importance of properly aligning our goals and management’s, the structuring of management’s participation receives a significant amount of pre-closing attention. Typically, the management team will have the opportunity to invest their own funds on the same terms as NSCP and its outside investors. This generally involves various option plans that feature a performance element.
In all cases, we address management issues in an equitable manner with the goal of fostering a true sense of partnership between management owners and NSCP.