Invest in People
Investing in people and not just companies has been a core philosophy of HKW, which strongly believes the quality of a management team is the crucial component to a successful transaction. HKW invests in companies with management teams that have proven experience and want to own equity. This not only aligns the incentives of the management team with shareholders but also allows management to share in the value they create.
Invest in Companies with Solid Fundamentals
Choosing the right companies is critical to HKW’s success. The excellent results HKW has achieved are due, in part, to the disciplined buy-and-build investment strategy the company follows. HKW seeks to invest in companies that have a sustainable competitive advantage and defined growth strategy. HKW seeks companies that have a history of predictable cash flow that can be acquired at fair transaction multiples.
Invest in Small Middle Market Companies
HKW concentrates its investment efforts on private and public, small middle-market companies with low risk of technological obsolescence. HKW focuses on management buy-outs of companies which have revenues between $20 million and $200 million, are headquartered in North America and are established leaders in their respective niche markets.
Create Shareholder Value
HKW does not seek day-to-day control but rather provides management the necessary tools and discipline to control and facilitate the growth of a portfolio company’s business. Each portfolio company is strongly encouraged to embark on a strategic planning process. Through this process, current operations are assessed and future product development and new market opportunities are identified and explored. Portfolio companies then focus on the growth of their businesses and on creating value through execution of their strategic plans.
HKW provides assistance to its portfolio companies on legal and insurance matters. In addition, HKW provides general merchant banking advice and support, especially with regard to financing matters and sourcing, negotiating and closing add-on acquisitions.
Provide Transaction Experience
HKW has distinguished itself from its competitors by working closely with a seller to develop a solid trusting relationship before signing a letter of intent. In addition, HKW is flexible in structuring transactions so it can identify and fulfill the seller’s financial goals.
HKW has completed several types of transactions, including industry consolidations, corporate divestitures, generational changes in ownership, growth equity, management buy-outs and recapitalizations. HKW has been successful in using a variety of capital market sources, including all types of senior lenders, mezzanine lenders and seller financing.