ACCESSING THE DEAL FLOW
Identifying the investable
Our potential investment targets arise mostly through our own research and from our networking efforts. They also come from introductions from owners and managers of existing portfolio companies. We also welcome introductions from intermediaries and third parties, but we particularly appreciate direct contact from entrepreneurs and owners.
After a short initial review of an opportunity, we’ll indicate the terms and conditions of a likely investment. >> more
We operate using regionally based teams which are responsible for identifying, negotiating and structuring investment transactions. They’re supported in their efforts through an interactive relationship with the CEE-based ABRIS Investment Committee. >> more
When we investigate new opportunities, we typically supplement the efforts of our deal team with selective support from external professionals and specialist consultants.
The resulting due diligence process provides an opportunity for us to fully understand the target business and to interact intensively with its owners and management. As such, we believe it provides a valuable way to build trust and understanding between all parties and to establish a sound basis for future cooperation.
Following completion of an investment transaction, we’ll remain actively engaged in supporting and expanding the value of the business. >> more
Specifically, we have the in-house experience to provide:
- detailed advice and assistance in acquisition planning (domestic and cross-border)
- capital expenditure procurement
- management recruitment and other value-adding areas.
Crucially for supporting our portfolio investments, the majority of our professionals have a depth of previous operational experience across a wide range of international and local industries. Uniquely, this gives us important insights into the many challenges likely to confront local management teams.
In short, we’re practitioners, not theorists.
Before a final commitment to any investment, we’ll discuss in detail likely exit plans with the business co-owners and management. We’re patient in our expectations for building value but it is a pre-requisite that at some stage we will realize our investment in order to return capital to our institutional investors. >> more
Appraisal & approval
Our ability to complete an investment transaction will depend on the deal team securing the support of the Investment Committee. The ABRIS process is designed to make sure that this decision is timely and predictable. >> more
The Investment Committee includes all the senior ABRIS Partners so this streamlines the Committee’s decision-making abilities.
The Committee is based in CEE and is usually able to respond quickly to new information and changing circumstances. It plays a vital role in the appraisal and approval of any investment transaction.
VALUE BUILDING PROCESS
Prior to completing an investment, we will have identified and agreed with management a number of key appointments and actions which need to be implemented over the following weeks and months. Each business will require its own priorities but ABRIS has identified a number of measures which are typically required and which will, in the medium term, help build value for a mid-market company. >> more
Commonly required steps may include:
- Strengthening of the management team through the selective appointment of new skills and functions
- Improvement of financial and operating performance monitoring, perhaps accompanied by an upgrading of IT systems
- Introduction of specialist external industry advice either at board level (possibly as a non-executive director) or from retained consultants
The objective of these actions will be to create a class-leading business in terms of its reporting standards and effectiveness. It is our belief that increased transparency and the ability to closely monitor the financial and operational aspects of a business is critical to maximizing its future value.
In parallel with improving reporting standards and management effectiveness, we will seek also to contribute to the operational success of the business. This may start with the execution of an agreed “100-day plan”, during which management will implement the most pressing changes required and build the groundwork for implementing longer-term strategic goals. It may also involve ABRIS in providing practical assistance to execute some of the other actions needed to grow the business and increase its ultimate value at the eventual point of sale. Specific areas in which we are most closely involved would include:
- Cross-border expansion: we can use our regional networks to facilitate and simplify migration into new markets
- Acquisition activities: ABRIS is skilled at identifying and overseeing the acquisition of target companies whether to deepen current market penetration, to expand existing geographical reach, or to incorporate complementary products or services
- Professionalization: it is ABRIS’ belief that in an increasingly global marketplace, businesses need to aspire to the highest levels of transparency and professionalism if their value is to be maximized. We therefore place particular emphasis on working with our companies to implement appropriate environmental, social and governance (‘ESG’) considerations into their practices and operations
Before completing any investment process, ABRIS will pay particular attention to evaluating the alternative ways in which it will, in due course, be able to realize its investment. It is important to us that our expectations are transparent to, and aligned with, those of our company’s management and fellow shareholders. >> more
In agreeing a shared objective in terms of exit timing and methodology, we believe it becomes clearer and easier to determine business strategy and operational matters.
ABRIS has experience in all the typical methods of value realization – trade sale, IPO and secondary sale - and has the skills necessary to guide and advise portfolio companies through this often complex process. We are aware that the choice of exit path is an important one for both management and owners. As such, and before committing to any specific methodology, we undertake wide consultation with stockbrokers, investment bankers and other market experts in order to gain an in-depth evaluation of market conditions and exit prospects. Having made a decision on a preferred exit path, particular attention is then paid by ABRIS to the selection of the various types of professional advisers necessary to facilitate the process; thereafter, ABRIS is well-used to directing and managing their involvement.