Middle-Market Growth Companies
JWC focuses on middle-market growth companies, typically with $150 million to $600 million in total enterprise value which have the capability to grow earnings at a rate of at least 10% per annum. The middle-market provides investors with the opportunity for extraordinary returns when a growth company exceeds expectations. In addition, companies in this size range can often derive significant benefit from the efforts of our Operating Partners.
Industry Emphasis
While JWC is opportunistic in seeking growth oriented investments, the firm places particular emphasis on consumer products, healthcare, specialty retail companies and asset management. These are the sectors in which the Operating Partners have particularly applicable experience and where the partners have had their greatest investment success. We target companies with strong brand franchises and/or leading market share positions that benefit from barriers to competition and high profit margins. Accelerated revenue growth is frequently achieved through new product introductions, product line extensions, shelf space management, expanded channels of distribution and geographical expansion.
Adding Value
To generate superior returns, we believe that we must complement good investment decisions with tangible sources of value creation. At J.W. Childs, we focus on providing three primary sources:
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Operating Partners - The Operating Partners have long and successful records of operating experience with major U.S. corporations, including General Nutrition Companies, Best Foods (formerly CPC International), Caremark International, Danaher, General Electric and General Foods. More importantly, each has been the CEO of a successful middle-market leveraged buyout or privately held company. Their broad managerial expertise and exposure to best practices are valuable assets for the companies in which we invest. The Operating Partners participate in the due diligence and investment decision processes, as well as the subsequent oversight of portfolio companies. Their role ranges from active member of the board of directors to non-executive chairman of the board.
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Operational Excellence - Through the operating partners, J.W. Childs has access to extensive in-house and external expertise in maximizing the efficiency of business and manufacturing processes by reducing lead times, increasing throughputs and reducing capital intensity. These techniques are applicable to a broad range of businesses, and are proven creators of investment value.
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Asian Capabilities - As the level of interaction has increased between our portfolio companies and Asia, particularly China, J.W. Childs has taken steps to extend our value adding capabilities into this area. Through a network of contacts and advisors located in the region, J.W. Childs is well positioned to work with portfolio companies and potential acquisition candidates in either North America or Asia to create value through initiatives that combine the strengths of, and opportunities in, the two regions.
Partnership With Management
A key to our successful investment approach is working with strong management partners. In every investment company, management will have the opportunity to purchase and earn a meaningful equity position, aligning their interests with those of JWC while offering entrepreneurial-size rewards to management teams who achieve their objectives. The chief executive officer of each of our portfolio companies is responsible for staffing his or her team, as well as proposing the equity allocation for their management teams.
Direct Personal Co-Investment in Transactions
In every transaction, the professionals of JWC invest substantial personal capital directly in the equity of a prospective portfolio company. The firm’s professionals have committed $115 million of personal capital to be invested in portfolio companies alongside management and the current investment fund.
