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Green Park Partners Ltd
Green Park Partners Ltd

Green Park Partners

Principal Investor

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Investment Strategy

Green Park Partners target situations where corporate owners are seeking to divest non-core or orphaned businesses but are unable or unwilling to exit through a formal sale process.

Such businesses may have low or negative profitability, low strategic value or be situations where owners have particular preferences in terms of a sale, for example in terms of timing, carve-out or going-concern requirements.

We are particularly interested in businesses that require revitalisation through strategic and operational improvements.

Active Value Creation

  • Acquire majority holding in medium-sized companies in transition or special situations.
  • Hands-on involvement: (i) focusing business for operational efficiency, (ii) modifying business model for growth.
  • Aim to stabilise a business and ensure a path to stable growth.
  • Classical opportunistic exit approach or buy-and-build/hold strategy.
  • We act in the role of lead principal and partner with co-investors particularly on larger transactions.

Investment Criteria

  • Solid fundamentals:
    – Established position in stable industries with limited market cyclicality (and limited technological risk).
    – Offers product and/or services that meet market requirements.
    – In an industry with barriers to entry reducing risk of change in competition.
  • Performing below industry averages in terms of profitability and recent growth – penalised by:
    – Typically neglected business – i.e. lacked “commitment and focus” from owner.
    – Strategic mistakes.
    – Lack of appropriate changes in company’s organisation and structure (excess costs and lack of focus).
    – Failure to adapt business model to industry and market changes (under investment).
  • Opportunity to improve:
    – Companies where value can be created through GPP’s strategic, financial and operational engagement.

Target Characteristics

  • Motivated vendor.
  • Revenues between £10m – £100m.
  • Transaction value £10m – £100m.
  • Earnings positive, negative or break even.
  • Located in UK, Northern Europe and Europe.
  • Some aspect of complexity.

Target Sectors

  • Manufacturing / industrials.
  • Industrial and professional services (B to B).
  • Specialised distribution (B to B).
  • Healthcare segments with low R&D intensity (manufacturing, equipment and services).
  • Distribution and services (B to C) on an selective basis.

Transition Situations

Our focus is on companies that have become “stuck” and need to “transition” to ensure future profitability and growth.

We focus on companies where ownership change is required to enable the company: (i) to become focused – to ensure business issues are addressed and restructured to improve operational efficiency; and (ii) to be repositioned – to ensure business model is modified to reposition the company in its market and industry for future growth opportunities.

We classify transition situations as a “Legacy Asset” or “Lone Wolf”.

Legacy Asset

  • Non-core businesses in larger corporate groups.
  • Once part of the group core strategy, the business has become non-core to the group – a “Legacy Asset”.

Lone Wolf

  • Smaller companies in fragmented industries that are consolidating – a “Lone Wolf”.
  • As a result of consolidation, industry dynamics are changing and company’s competitive position is deteriorating.
  • Owner is unable or unwilling to invest further in the business.

Legacy Assets

Legacy Asset is a business that was once a core part of a larger business group but where circumstances have since changed and where the business is now no longer a key part of the group. Market requirements may have changed and the demand for the company’s products and services may have declined or the growth prospects may no longer meet corporate targets.

Corporate strategy has changed and new opportunities presented themselves which are now the focus of the group’s time and resources.

Companies once part of the core strategy become non-core – become Legacy Assets.

Natural Part Of Corporate Evolution

  • Most corporates operate in several business areas – separated by e.g. product type, target market or geography.
  • Corporate strategy evolves over time – a business once “core” has become “non-core”.
  • The non-core business becomes a distraction and owner is reluctant to invest further time and resources.
  • Divestments are a natural part of corporate evolution.

Non-Core Situations

  • Not a Fit Anymore
  • – Business no longer fit the group’s core strategy.
    – Business operates in a market where growth is low, flat or negative – doesn’t meet growth expectations.
    – Business is underperforming – doesn’t meet group performance targets.

  • In Transition
  • – Company has significant liabilities and/or is exposed to substantial future risks.
    – Company needs balance sheet and/or operational restructuring – carries risk and costs.

  • A Distraction
  • – Corporate is reluctant to invest further time and resources.
    – Corporate reluctant to implement measures which could have an adverse effect on core business.

Corporate Would Like To Sell

  • Group management needs to demonstrate to shareholders that it is in control and able to focus and develop the group.
  • Group wants an exit solution.

Lone Wolf

Most industries change and evolve – and over the past 20 years many have seen the emergence of larger competitors that offer their products and services nationally and internationally. Industries consolidate and some stand-alone companies, although enjoying profitability and growth, gradually become more exposed and their competitive position threatened.

These companies need to take proactive measures to ensure their business and seek a new path for developing the company.

In many cases the current owner is unwilling or unable to take the business forward.

Industry Fragmented

  • Industry polarised between large (full offer) players and specialists focusing on geography, market segment or customer group.
  • Trend is to sell full solutions integrating products and services, thereby offering clients cost and administrative benefits.

Industry Consolidating

  • The industry has been / is consolidating.
  • Scale economies are significant and larger competitors more profitable and enjoy stronger market positions.
  • Consolidation creates scale, increases geographic coverage and/or adds new skills.
  • Consolidation offers opportunities to realise cost synergies and to cross-sell into a joint customer base.

Owner Would Like To Sell

  • Smaller companies face increased competition.
  • Owner understands the trends in the industry, but is not able or willing to proactively participate in growing and repositioning his company. Maybe due to lack of necessary skill-set, management or financial resources or owner may be considering retirement.
  • Recognise risk and challenges of remaining small – and is considering selling but finding it difficult to make the decision.
  • Owner also likely to have certain price expectations but lack clarity on market interest and his exit options.
  • Owner would like to divest his business.

Our Focus

Traditional strategic and financial buyers typically have very specific criteria for acquisitions and many situations will fall outside their “comfort zone”.

Many companies are in a transitional phase or have issues regarding their operations or the market they operate in. Many have performance issues due to lack of investment in developing the business or are in effect turnaround situations due to inefficient structures or processes or incorrect management.

Our focus is on these situations where owner is minded to transition a business to a new owner – but where there are circumstances that mean that traditional buyers do not represent a viable exit route.

Where Traditional Buyer Interest Is Low

  • Strategic buyers – seek good strategic fit and often good profitability.
  • Financial buyers – seek strong growth prospects, IRRs of at least 20-25% and limited risk.

GPP Focus

  • GPP focus on the opportunities that “fall between” these two traditional buyer groups:
    – Targets where strategic buyers do not view as a good fit.
    – Targets not meeting typical financial buyer return targets and where turnaround risk is seen as too high.

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