Not Business As Usual

At Wasserstein & Co., we do not buy companies to conduct “business as usual.” Rather, we work with management to formulate a well-defined strategic vision to help a portfolio company embrace change and create value. This nearly always includes a strategic shift in the way the company approaches its business. That shift may include any of the following:

• Substantial investment in products or brands in need of revitalization;
• Additions or modifications to management or the infusion of energy into management by removing obstacles to their success;
• The launch of new products or expansion into new geographic markets;
• The implementation of “best practices” learned over many years in historical investments;
• The identification and completion of strategic add-on acquisitions at accretive multiples; or
• The further development of the online component of existing strong off-line businesses, particularly in the business-to-business or consumer publishing sectors

Protect On The Downside

In each case, we assess up front the investment that may be required to achieve the strategic vision, whether in terms of personnel, capital projects or otherwise, and determine whether the returns justify the associated risks. Our investment analysis is guided by our philosophy of achieving outstanding returns on a risk-adjusted basis. Our bias is toward conservative capital structures and preservation of capital, and against reaching for “home runs”. As such, we attempt to ensure that potential acquisition candidates have characteristics that would mitigate the risks of non-achievement of the new strategy. Such characteristics may include a valuable fixed asset base, strong free cash flow, valuable brand names and equity developed over many years, leading market shares in core areas, regulatory advantages, or other factors. Each of our funds invests in approximately eight to ten portfolio companies so that each senior partner has the ability to become immersed in our companies and their industries.

Invest Across The Capital Structure

In certain cases we may conclude that the best risk-adjusted return can be found in parts of the capital structure other than common equity. For example, we have invested in preferred stock and debt securities of a number of high-cash flowing businesses when events have allowed us to work closely with those companies to achieve substantial rates of return.

Be Open to Strategic Partnerships

Although we generally seek investments where we acquire significant control or influence, regardless of where in the capital structure we invest, we will also consider jointly investing with appropriate strategic or financial partners. We may also seek minority co-investments, including from our investors or from strategic third parties, in certain circumstances.