C.A. Bancorp has established detailed investment criteria to facilitate the evaluation of each investment opportunity. The following is a representative breakdown of what C.A. Bancorp will review when evaluating a potential portfolio company:
• management team
• industry dynamics and structure
• company characteristics and feature/organization
• board of directors
• structure of investment
• financial performance
• exit criteria and opportunities for the investment
Managing the investments
C.A. Bancorp is an active investor that will work with management teams to improve both the financial results and the strategic positioning of its portfolio companies. We will focus on aligning management’s interests with our own by encouraging senior managers of our portfolio companies to become significant, long-term owners of their businesses. In conjunction with management and other stakeholders, C.A. Bancorp will seek to proactively identify and develop initiatives for change, including:
• implementing strategic initiatives that will materially enhance revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) growth rates
• recruiting new talent to improve management teams
• improving governance by building an effective board of directors
• refinancing/restructuring the balance sheet
• implementing an effective process for capital allocation
• providing advice on strategic positioning to enhance overall value
Following the investment, C.A. Bancorp’s representatives will typically become members of the board of directors of the portfolio company and will maintain regular contact with its management.
C.A. Bancorp will create value by providing the capital and management expertise necessary to assist small public or private companies to grow in order to take advantage of greater investor appeal, higher valuations and enhanced attractiveness to strategic buyers and investors. C.A. Bancorp intends to work strategically with the management of portfolio companies to quickly improve the fundamentals of the business and prepare such companies for a strategic sale or business combination, refinancing or public offering, as may be appropriate depending on the particular circumstances.
Managed exit strategy
The management of C.A. Bancorp will carefully consider the holding time horizon and possible exit scenarios for each portfolio company investment. Exit mechanisms will include the sale to strategic buyers or financial investors, open market sales, normal course retirement of securities, refinancing and public offerings. We will utilize our extensive business contacts to maximize the exit value of its investments, including Canadian and international merger and acquisition specialists and investment bankers.