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investment opportunity is underpinned
by rigorous due diligence, industry
analysis, and an intensely analytical
focus on value. We believe that
this disciplined, value-oriented
approach serves investors well,
even in an environment which may
have flat or contracting valuation
multiples over the holding period
of an investment. We proactively
target companies with defensible
business models, strong industry
positions, and best-in-class management
teams.
Crossover’s
comprehensive due diligence process
includes assessments of a company’s
management team, market and financial
position, prospects for growth,
and corporate governance. Our
investment professionals spend
a significant amount of time with
senior managers to understand
fully the opportunities and risks
of a business and their vision
for the company going forward.
We visit offices and other facilities
to review the business with executives,
managers, and key people responsible
for the critical success factors
of the business. Additionally,
we interact with customers, suppliers,
and industry experts. This approach
to due diligence reflects our
conviction that long-term value
creation is the consequence of
an investment thesis based on
detailed industry and operational
knowledge.
When an investment team concludes
that a business is worthy of serious
consideration, the opportunity
is presented to the firm’s
Investment Committee consisting
of the firm’s most experienced
investment professionals, industry
consultants, and special advisors.
Consultants and Special Advisors
often assist the Investment Committee
by providing an additional assessment
of a particular company and the
competitive dynamics of the market
in which it operates. Upon completion
of the due diligence, we discuss
the broad terms of investment
with the company, and sign a term
sheet summarizing the principal
terms of the investment.
Once the investment has been made,
Crossover
professionals take an active role
in monitoring and supporting enhancement
of equity value for its investments.
In recognition of the importance
of initiating and supporting post-acquisition
programs to enhance value, Crossover
has a dedicated team responsible
for monitoring the strategic,
operational, and financial performance
of its portfolio investments.
This consists of working with
the management team to devise
a 100-day plan for the company
that sets forth the steps necessary
to achieve immediate goals. Six
months after a transaction closes,
the deal team presents a progress
report as well as review plans
for the rest of the year with
the management team of the company.
This proactive approach enables
us to determine the optimum timing
and structure for exiting an investment
which may take anywhere from three
to four years. Simultaneously,
we engage with consulting firms
to develop a balanced scorecard
of our portfolio companies, and
with the investment banking community
to assess favorable exit strategies.
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