R&M from time to time invites parties to co-invest with it –
• in well-established profitable private companies
• that have sustainable business models
• generate an EBIT of $2 million to about $8 million per annum, and
• are valued at 4 to 5 times EBIT
(Valuations based on a 4 to 5 times EBIT multiple imply 20% to 25% per annum pre-tax and pre-gearing returns on investment.)
Little (if any) premium will be paid for ‘blue sky’. R&M may however agree to the vendor being paid (by the business rather than by the investors and for a limited period) a share of the amount by which the post investment EBIT exceeds an agreed EBIT, which most likely will be the EBIT on which the investment is based (the ‘buy-in’ EBIT).
With a view to aligning the interests of the investors with those of management, R&M prefers the management team to also invest in the company and prefers them to receive any performance bonuses in shares (rather than in cash) held in escrow for at least 3 years.
Register your interest – to be alerted to co-investment opportunities – by sending an email to email@example.com.