Posted: 12 November 2020

What I look for in a company

What I look for in a company

Tim Whittard leads our deal origination activities in the Midlands, South West and South East. Here he outlines three key things he looks for when considering investing in a company.

  1. Quality management team

    Most of the deals we do are management buyouts so the quality of the management team is fundamental for me. Understanding how well the team know their market; how strategic or operational are they; what contribution to the growth track record comes from where in the team; and, most importantly, how the individuals work together, what is the dynamic? Once we have been able to evaluate this we can work together to identify how WestBridge can best help the team to deliver their goals and to also evaluate how deliverable the business plan is.

  2. High growth, niche market

    We like to invest in businesses operating in markets with existing scale that are growing, are highly fragmented and have some barriers to entry. These key characteristics provide the best fundamental underpinnings for a successful investment. Larger growth markets allow rapid organic revenue development for good businesses (particularly ones with significant USPs – see below) and with high degrees of fragmentation, selective acquisitions can help to grow the business cost effectively. High barriers to entry keep the competitive dynamic to a minimum which will help underpin margin maintenance and potentially allow for enhancement.

  3. What makes it special

    A company that is established and successfully in a high growth, niche market will have characteristics that make it special and unique selling points or USPs that give it its defensible market position. Gaining a good understanding of these USPs, how they can be added to or augmented and how defensible they are is critical for us to understand the deliverability of the growth and margin projections and therefore how the business is likely to develop over the business plan period.

Typically, WestBridge invests between £10m and £20m in established, profitable and fast-growing UK SMEs with enterprise values of up to £40m.  We are always keen to hear from ambitious management teams that require development capital, acquisition funding or support for a management buyout.  To hear more about our investment criteria or discuss the suitability of a company,
do get in touch.

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