Acquisition Activities

Mills & Partners has developed a series of criteria that should be present in target companies to have them considered for acquisition. Acquisition candidates include companies with the following attributes:

• Well-Defined Niche Business An established business whose product demands remain stable during periods of economic recession and are not a risk to rapid technology change.
• Leading Market Position A favorable cost structure and established brand names with dominant market share positions.
• Strong Growth Potential Potential for significant earnings growth based on favorable industry trends as well as strategic acquisitions and expansion into new geographic markets.
• Diversity of End-Users A diverse array of end-user markets, which reduces the company's dependence on any one industry and minimizes the adverse effects of business cycles.
• Qualified Management Team A demonstrated ability and commitment to continual improvement in profitability by improving productivity and reducing costs. In order to align management's interests with the interests of investors, Mills & Partners offers stock ownership and performance incentives.
• Reasonable Selling Price The purchase price of the acquisition candidate must be reasonable relative to its historical and projected cash flow and able to offer superior equity returns relative to public equity alternatives.

Acquisition candidates may include divisions or subsidiaries of public and private companies, public companies desiring to go private and private companies whose investors are seeking liquidity. Acquisitions are typically financed using a combination of senior bank borrowings secured by the target company's assets, subordinated indebtedness and equity.

Mills & Partners has participated in originating transactions having a listed value in excess of $9.6 billion, ranging from less than $5 million to nearly $2.0 billion, as well as $3.0 billion in sale and recapitalization transactions. One of the largest transactions was a comprehensive financial restructuring, planned and engineered by Mills & Partners within the favorable interest rate environment of 1993.

Individual acquisitions greater than $300 million have been completed in the acquisition of Mills & Partners' core operating companies. In addition to the acquisition of core operating companies, Mills & Partners actively pursues strategic add-on acquisitions. Through add-on acquisitions Mills & Partners has been able to take advantage of alternative channels of distribution, provide product diversification, generate operating efficiencies, eliminate overhead and redundant operating costs, and enhance our equity partners' position. Mills & Partners has completed more than 35 strategic add-on acquisitions.