We invest in companies (private or public) alongside existing experienced owners or managers who embrace our active participation. For such a partnership or investment to realise its full potential, the business should be aligned with all the parties growth and exit aspirations.
HighPoint Capital does not favour any one industry or sector. Instead we consider a broad range of potential investments based on the quality and integrity of management, the company’s growth prospects and our ability to add value to the opportunity.
More specifically we look for businesses that have:
- Sustainable operating cash flow (between $2m and $10m in EBITDA)
- Enterprise value <$60 million (if ASX listed then up to ~$100 million)
- Minimum three year trading history
- Identified competitive advantage
- Positioned for strong organic growth or growth through acquisitions
- Require additional capital or expertise to deliver on the growth ambitions
As a result of the fact that we may be working together for several years we look for chemistry between the two teams, shared values and strong agreement about goals and priorities.
Outside of the above criteria we will also consider:
- Backing a successful management team from an industry they have recently exited and with a business model that presents with a clear path to fast tracked profitability;
- Businesses where there is a clear and deliverable strategy that will see the business meet the above criteria within a short timeframe; and
- Financially distressed companies which have sound underlying businesses but which suffer from an inappropriate legacy capital structure (ie: not pure turnarounds).
We adopt a wide range of investment structures, including minority ownership stakes, but most importantly we take a conservative attitude towards debt and generally avoid highly geared businesses.
We typically invest between $3.0 million and $10 million per investment (single or multiple tranches), although larger amounts can be arranged by syndication with our co-invest partners.
We generally DO NOT invest in:
- Early stage businesses
- Hostile takeovers
- Wine & Agri businesses
- Pure property or construction