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ALC seeks to invest in
emerging, middle market private Chinese manufacturing companies with
excellent management, in a product market which is growing in China,
and for which there are existing and growing markets
internationally. ALC also seeks to acquire state owned enterprises
(SOEs) which support its investment strategy. ALC looks
for platform acquisitions in a product sector in which consolidation
can produce value and position the enterprise for one of several
exit transactions.
ALC brings substantial business experience and skills, through its
professionals, advisors and business network, required to develop
and implement valuing enhancing strategies for these companies.
Basic Acquisition Criteria for Private Companies
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General |
Well run mainland Chinese domestic companies, with growth
potential (robust and growing market domestically for product
which is also being exported) where we can improve operations
(including information systems, QA/QC processes, manufacturing
processes, and accounting to Western standards), enhance the
management team and make strategic add-on acquisitions.
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Current Owner/ Management |
Strong management
with owner/manager looking to
improve the company and expand markets. |
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Size |
$25 to $100 million revenues—more if justified. |
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Product |
Simple products—basic manufacturing, easily understood, low risk
of technological obsolescence, foreign market for the product,
sustainable price advantage in foreign markets. |
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Earnings |
Demonstrated consistent earnings. |
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Market Position |
Leaders or near leadership positions in their respective
industry segments. |
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Ownership |
ALC prefers majority ownership, with management retaining
meaningful share; minority position acceptable, provided ALC has
control on exit timing and strategy or option to acquire control
under defined circumstances. Must have the ability to monitor
operations day to day and place a representative in the
operating company. |
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Growth Potential |
Robust and growing Chinese market for the product and sizeable
export market. |
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Location |
Located within 2 hours?drive from international airport, with
ready access to transportation to ports. |
Basic Acquisition Criteria for State Owned Enterprises (SOEs)
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General |
SOEs with operations which meet our criteria for privately
operated companies, or which have operations or assets related
to platform companies which ALC acquires. The SOE opportunity
must be one in which ALC has a competitive advantage over other
potential buyers, as ALC generally avoids pursuing companies
which are subject to public bidding or auction. ALC generally
seeks to work with current management of the SOE in a management
buyout. |
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Management |
Willing to work with ALC, oriented to value creation/exit,
flexible about bringing in new management. |
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Size |
Medium and small. |
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Earnings |
Pro forma positive earnings. |
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Ownership |
Control enterprise or assets, generally with existing management
taking incentive equity stake. |
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Capacity/Capital Investment |
Little or no capital investment required. |
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Exclusions |
Idle plants (re-startups). |
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