The important factors, which influence Balmoral’s decision to acquire a company, are the capability, integrity and depth of its management. We must believe in the people we do business with. A key requirement is a management team that is excited about the company’s potential and eager to invest both effort and personal capital in its future. Therefore, Rodney Kincaid or a staff visit each merger or investment candidate and do inperson due diligence anywhere in the world.
Balmoral provides direct equity investment and performance based incentive plans for an extensive management group. Experience has demonstrated that broad management participation contributes much more to a successful transaction than limiting ownership to a small group of senior executives.
In addition to seeking high quality and proven management, Balmoral looks for companies having:
Sufficient cash flow to service acquisition debt, as evidenced by stable and predictable operating earnings and cash flow in excess of capital expenditures and working capital requirements.A strong market position based on market share, relative cost position, proprietary products and valueadded services, brand name strength, favorable distribution channels, sustainable franchises and undervalued assets.The potential for a significant increase in equity value achieved, for example, through earnings growth, repayment of debt, investment in capital equipment, and strategic acquisitions.
Balmoral has made investments in a wide range of different businesses and industries. The Firm’s philosophy is to encourage capital expenditures and strategic acquisitions by its portfolio companies in order to maintain and expand upon their strengths.
Balmoral’s portfolio companies have increased profitability by improving operating efficiencies and accelerating revenue growth. The Firm’s middlemarket portfolio companies have achieved this success by using the following methods:
- making strategic followon acquisitions of small and mediumsized companies in related businesses
- investing in new products and services
- reducing operating costs through efficiencies of scale
- improving marketing techniques, distribution channels
- product development
Often, portfolio companies require incremental equity capital either to finance followon acquisitions or to sustain high levels of internal growth.
The Firm generally will seek control oriented equity investments in companies led by strong management teams responsible for strategic growth and daytoday company operations. Occasionally, Balmoral may take minority stakes in companies, typically in conjunction with board representation or other significant shareholders’ rights, or may join with other investors as a member of a control group.
The Firm has played the role of “White Knight” on several occasions and, as a matter of policy, does not engage in hostile acquisitions or substantial dismantling or liquidation of companies.
As mentioned before, for the last five years Balmoral has focused on investments in the renewable energy area. These include
early and later stage investments in renewable energy technologies acquisitions and mergers deals with Companies who have IPO potential. bridge financing in power plants, such as wind and solar farms. Special Purpose Vehicles (SPV’s) to
do buying and selling of permissions of Wind and Solar Farms Balmoral may assist a portfolio company to prepare for an IPO, by acquisitions, reverse mergers or by acquiring assets like solar farms and wind.
Balmoral employs a small professional staff, and works with a global network of almost 50 Agents, that will generate deal flow and assist in conducting transactions. Sectors include biomass, biofuels, gastoliquids, wind, solar, CSP, CPV, Thermal Solar, tidal power and clean coal, among others.
Balmoral Capital and Balmoral Hedge Fund #2101 invests in renewable energy projects and companies spanning all geographies and strategies. As a broker and a primary investor, Balmoral has developed solid relationships with over 82 General Partners in more than 100 funds.