|
WHO WE ARE
The Business of Arglen is that of acquiring revenue producing assets for the long-term wealth creation of its shareholders, partners and employees. Arglen plans to achieve this objective by orienting itself as a Private Investment Firm as well as a Venture Capital Firm to take advantage of current market conditions.
PRIVATE INVESTMENT FIRM
Arglen Corporation is a private investment firm seeking to make equity investments in corporate buyouts and structured opportunities on behalf of itself and its investors.
VENTURE CAPITAL FIRM
Arglen is also a venture capital firm dedicated to helping outstanding entrepreneurs build world-class technology companies. In order to meet this challenge with a "prepared mind," we focus the funds investments in just two areas: Business-to-Business (B2B) applications and the Internet. Arglen’s Principals have a deep base of domain knowledge, relevant experience and industry contacts. It's what allows Arglen to be more responsive, add more value, and ultimately be the best partner to the very best technology entrepreneurs.
As the general and managing partner of the Arglen group of Funds, Arglen’s business is focused on making equity investments, for long-term appreciation, either through controlling ownership of a company or strategic minority positions.
Arglen’s opportunities and vision are always focused on value creation and realization. Our long-term objective is to maximize the value of the Company for our partners and principals by ACQUIRING high-quality, well managed companies at reasonable prices, CREATING VALUE through the entrepreneurial management of these companies and REDEPLOYING ASSETS at opportune times.
As a result of Arglen’s partners and global affiliations, Arglen strives toward:
Financial and Market Strength;
A Powerful Global Presence;
Leading-Edge Business development capabilities; and
A strong relationship focus.
|
|
|
|
OUR PRINCIPLES
Arglen operates as a private investment firm, not as a conglomerate or a holding company. Each fund and portfolio company will be independently managed and financed. Each will have its own board of directors, which includes Arglen representatives. There will be no cross holdings nor will cash flow from one company be used in another company.
We are "involved," patient investors. The average time period we expect to own a company is approximately five years. We take a long-term view of a company's performance. We are not concerned with quarter-to-quarter results, but rather focus on cash flow and look at results over a number of years.
Existing management will be our partner in creating value. Our portfolio company managers will have a significant amount of their personal net worth invested in their companies because we strongly believe that the best managers think like - and are - owners.
We want our portfolio companies to invest for future competitiveness. We will encourage them to take a long-term perspective; to maintain their business focus; to manage the balance sheet as well as the income statement; to make strategic acquisitions; to motivate a wide range of employees by giving them a stake in the business; and to build for the future through prudent capital investment, research and development spending, and new product marketing.
APPROACH TO BUILDING VALUE
Arglen’s goal is to achieve high rates of return for the Arglen Funds by investing large amounts of capital for long-term appreciation. In pursuit of this goal, Arglen anticipates completing an average of four transactions per year in a wide variety of industries. But more than size, number or even diversity, Arglen’s hallmark will be its willingness and ability to seize opportunities quickly, remain flexible and to continually and successfully adapt to changing market conditions.
The diverse nature of its planned investments over time will reflect this versatility. Arglen will execute management buyouts of large, mature companies; make acquisitions in traditional growth industries; pioneer leveraged investments in novel fields; create stand-alone, independent companies from large corporate parents; and make equity infusions to restructure highly leveraged public companies, setting new standards for creativity, innovation and flexibility in the process.
The bedrock of the firm’s future success are its core investment principles. Embedded in these principles is Arglen’s long-standing recognition of the fact that the closing of an acquisition is only the beginning of the process of delivering value. For Arglen, success in equity investing depends not only on identifying and consummating acquisitions, but also cultivating and nurturing them.
Our approach to building value involves a careful, painstaking and well-honed methodology for identifying investment opportunities. After a deal is done and the headlines are gone, Arglen will embark on years of diligent work along with the management of its portfolio companies to realize the full potential of its acquisitions.
Strategy:
Partnering with some of the world's most sagacious and influential individuals, corporations and funds, Arglen is capable of accomplishing its strategic objective of wealth creation and realization by originating, structuring and acquiring interest in emerging and established companies capable of significant growth through the resourceful capabilities of an accomplished and proven infrastructure which enables Arglen to draw upon the financial and entrepreneurial expertise of each of Arglen's partners. Investments consist of capital infusions, joint ventures, buyouts, restructurings, recapitalizations, tax loss realization structures and privatizations.
Leveraging Arglen’s Global Resources:
Working through international syndicates, we seek the capital commitments required as well as the support and required management expertise necessary to successfully execute our wealth creating strategies. Arglen will draw upon the expertise available from its interests in investee companies and from its partners’ interests.
Deal Origination:
Arglen has developed a unique set of skills and resources that position the firm to identify opportunities and consummate transactions on behalf of itself and its investors. Chief among them are a reputation as a serious and capable buyer and a formidable network of relationships in both "Main Street" industries and throughout "Wall Street." Together with the Arglen Group’s long-standing track record, these attributes will ensure that Arglen gets a good look at almost every major opportunity in the market.
Arglen will evaluate many potential investments each year. Once an opportunity has been identified, Arglen will employ a number of strategies to secure a transaction. Whenever possible, Arglen will work with companies and managers on an exclusive basis to develop transactions. A less preferred route is the auction process, which, despite the drawbacks of competitive bidding, can lead to major successes over the years.
Critical to consummating investments is Arglen’s ability to move quickly and decisively to analyze and assess potential investments. Arglen has developed unique capabilities for conducting due diligence, combining its strengths with an extremely effective legal and accounting support team. Management teams at acquired Arglen companies may provide pivotal assistance by lending their expertise and judgment in identifying and assessing opportunities. Together, these capabilities will enable Arglen to analyze large, multi-faceted, multi-billion dollar enterprises that few others would be able to review adequately.
Structuring and Financing Transactions:
Arglen’s creativity in structuring transactions can unlock value and place the firm at a competitive advantage in bidding for a target. When appropriate, Arglen will negotiate into its deal structures substantial downside protection for the Arglen Funds in the event of adverse developments or changing market conditions.
Arglen’s transactional capabilities will be enhanced by its significant presence in the capital markets. Regardless of prevailing market conditions or available financing sources, Arglen will have the resources to engineer complex and advantageous financings in the marketplace. Because of the scope of its planned activities, Arglen anticipates being able to receive the best possible financing terms as well as being the recipient of virtually all ideas, both new and proven, from financing sources.
Overseeing Portfolio Companies:
Over the years, Arglen’s involvement in helping its companies enhance shareholder value will become widely recognized, and the manner in which Arglen executives fulfill their roles as active directors will be viewed, by many, as a model of effective corporate governance. The expertise Arglen brings to its portfolio companies includes, but is not limited to, the following.
Attracting Strong Management -- Arglen believes that each company should be run by the best professional managers available – individuals whose full time and attention are focused on creating value from a given business. In most situations, a strong operating management comes with the acquisition and is a principal reason for Arglen’s interest in the investment. When it becomes necessary to supplement management, Arglen’s relationships and its principal’s long-standing track record will enable the firm to attract the highest caliber of manager for its portfolio companies.
Management & Employee Incentivization -- In addition to attracting talented executives, Arglen will be innovative in its approach to structure management incentives and compensation plans that align the interests of management and shareholders. A requirement of engagement for all managers of Arglen companies is that they make a significant investment in their businesses, sharing directly in both the rewards and risks of equity ownership.
Incentive plans within Arglen’s portfolio companies are expected to extend as broadly as possible throughout these organizations.
Pursuing Acquisitions and Divestitures -- Arglen’s portfolio companies will be opportunistic in both buying and selling businesses. Arglen will serve as an important catalyst, offering an array of contacts as well as its own vast experience in executing transactions. The acquisitions and dispositions of Arglen portfolio companies will enable these organizations to expand and solidify market positions, better focus their businesses and increase their financial and operational flexibility.
Helping Portfolio Companies Arrange Financings -- Arglen will continually seek to optimize the capital structure of each portfolio company, taking advantage of opportunities in the capital markets to obtain lower cost funds or added flexibility. With Arglen’s assistance, virtually every one of its portfolio companies will be able to access efficient sources of capital over time, substantially improving their financial structures. At the appropriate time, Arglen will take portfolio companies public, generally using proceeds to deleverage and reduce the inherent risk for Arglen and its investors. Arglen’s level of involvement will not change after an offering; Arglen expects to remain a controlling shareholder and continue its oversight role, proactively analyzing plans and results, assisting in the formulation of strategy and evaluating management. Such efforts are expected to translate into superior results, with many of Arglen’s companies outperforming their industry peers after they go public.
Providing Effective Oversight -- The core oversight role that Arglen plays on a day-to-day basis through its position on the Boards of Directors of its portfolio companies is vitally important. Arglen will work closely with each management to put into place a rigorous infrastructure to monitor corporate results on a consistent and continual basis. The objective is to instill a discipline that translates into predictable and superior performance. Arglen executives will be involved in and knowledgeable about all aspects of a company’s business, continually reviewing budgets and providing input on broader strategic planning efforts and detailed financial forecasts. An important focus for Arglen executives is cash management; Arglen will play a central role in helping portfolio companies determine how they can operate most efficiently and best find and channel resources to serve specific strategic objectives. Over the course of an investment, difficult situations may arise. Arglen’s willingness to face such situations head-on and play an active role in their resolution will focus on preserving shareholder value and the long-term positioning of the company.
Maximizing Value When Exiting Investments -- The duration of the average Arglen investment is expected to be five to seven years, with the firm’s exit strategy being the final step in generating value. Capitalizing on the experience of its principal’s, Arglen will seek to maximize the value it can obtain through its exit strategy by carefully selecting the timing and method of sale. A significant amount of value is expected to be distributed to Arglen investors through secondary offerings of portfolio company stock as Arglen takes advantage of strong equity markets.
|
|
|
|
FUTURE OUTLOOK
There are some things that will never change:
A commitment to building and maximizing the long-term value of the companies we own, and to having those companies be the leaders in their respective industries.
A belief that our managers, and those of the companies we acquire, must also be owners.
An understanding that we must be proactively involved as partners with the management of our companies and yet give them the autonomy they need to grow.
A strategy of building and retaining a comparatively small, but highly skilled and committed team at Arglen.
CONCLUSION
Taken together, it is the experience, creativity and resources that Arglen and its Partners brings to bear on all aspects of its activities that set the firm apart – from transaction origination to acquisition financing, to the oversight and stewardship of its investments and, finally, the formulation and execution of its strategy for realizing the value created.
|
|
|
