Investment Strategy

ACP   seeks stable companies in non-commodity manu-facturing, distribution, and business-to-businesses services, and avoids businesses with products that rely on advanced or experimental technology.  Leverage will be used within conservative limits to finance acquisitions.  The firm may also co-invest as part of a syndicate in larger transactions that meet its investment criteria.

The firm will acquire profitable companies with revenues between $10 to $200 million and EBITDA of at least $1 million and reflecting an appropriate margin for the industry. Acquisitions must also meet the following criteria:

Investment Criteria   Consistent positive cash flow during at least the past five years with EBITDA exceeding $1 million     Mature, stable industry; business not reliant on new technology   Fragmented competitive and customer markets, with consistent (relatively non-cyclical) demand for the industry’s products   Opportunities for financial improvement (e.g., manufacturing or labor productivity enhancement, market expansion, scale efficiencies through add-on acquisitions, etc.)     Diversified customer base; sales not highly dependent on one or a few customers     Diversified supplier base     No foreseen developments that could adversely impact the company’s performance (e.g., demographic changes, technology shifts)     Access to knowledgeable and capable management     Proprietary edge over competition     Meets lender or institutional criteria for debt financing     Profitable exit opportunities     Acquisition multiple appropriate for size, industry, growth rate and risk profile

Ideal target companies are those that, while already profitable, can benefit from a renewed emphasis on operating efficiency, sales aggressiveness and, in certain cases, the application of IT or other established technology.

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Industries we invest in include the following:

Preferred Industries   Healthcare services and medical devices manufacturing     Aerospace and defense   Business to business services   Commercial manufacturing and distribution     Consumer products, including branded and private labels     Energy services     Industrial equipment manufacturing     Information technology (products and services)     Logistics and transportation     Security infrastructure manufacturing and services     Chemical manufacturing

In general, Aleutian does not invest in or acquire businesses where sales are limited to the company’s local geographic area such as restaurants and retail stores. However, some local service companies may be of interest depending on whether the busi­ness model is unique and can be replicated successfully at other locations, or if synergies can be realized from the acquisition and integration of similar businesses.

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