Our overall process is divided into three distinct phases, each of which requires a different combination of skills coordinated by Goodrum & Company's Manager and Chief Financial Officer.
The Selection Phase, which includes defining, finding, screening, qualifying and evaluating an investment, is done by Goodrum & Company's Business Acquisition Organization.
The Acquisition Phase, which includes pricing, structuring, negotiating, financing and closing, is directed primarily by Goodrum & Company's Chief Financial Officer with help of outside accounting and legal counsel.
The Monitoring Phase, which involves major policy decisions and performance measurement, is performed by Goodrum & Company's Business Management Organization.
The first step in the investment process is too carefully screen identified prospects to determine their suitability under certain criteria. The criteria listed below have been developed to assist in screening prospective acquisition candidates.
Established Business Enterprises
We acquire primary manufacturer's of industrial and consumer products with dominant market shares in concentrated industries or companies with significant leadership positions in fragmented markets; shipping companies carrying liquid or dry cargo's, bulk carriers or containers ships; Commercial Real Estate properties ie: hi-rise apartments & apartment complexes and office towers. We identify relatively mature companies in viable industries, which offer the potential to generate exceptional investment returns while also limiting the risk to the investment firm.
Proven Operating Performance
A record of profitable operations for at least three to five years. Constant earnings and consistent cash flow are more important than rapid growth. Size is not a factor. With regard to underachieving companies, we recognize that adverse circumstances sometimes produce historical results not indicative of the true potential of a business.
Strong Balance Sheets
Tangible, viable assets, a high degree of liquidity and little or no debt. We prefer companies with fast-turning inventories and accounts receivables; undervalued, excess or hidden assets and relatively low capital intensity.
Quality Management Teams
We prefer mature, experienced and competent operating managers with dedication, integrity and proven records of success. Management must be willing to remain or be easily replaced from outside.
After an acquisition candidate meets the criteria of Goodrum & Company, an extensive analysis is conducted of the company, its industry, products, service, competition, management, sales and earnings, balance sheet and cash flow. From this analysis, the company is valued, an offering price is determined and the financing and legal structure for the proposed investment is determined.
Goodrum & Company, usually represented by its Chief Counsel and Financial Officers, then conduct all negotiations between the sellers, the firm and the financial institutions and their respective accounting and legal counsel.
The financing of an investment is conducted simultaneously with the Acquisition Phase. Once the firm and the seller agree on price and terms, Goodrum & Company has the responsibility for arranging the necessary financing.
The completion of an acquisition signals the beginning of an extremely extensive follow-up process to ensure the success of our investment. Goodrum & Company devotes whatever amount of time necessary to ensure its new investment will achieve continued success. Our relationship with management is primarily supportive and will not become immediately involved in the day-to-day operations. Goodrum & Company makes its contribution through participation on the Board of Directors of the newly formed corporation.
By drawing on the collective experience and capabilities of our Operating Organization and Outside Consulting firms, we support management in the areas of policy, corporate goals and objectives, long range planning and strategies, business plans, financial planning, budgets and controls, cash management, credit data processing, equity and debt financing, merger and acquisitions, insurance programs, pension and profit sharing and other benefit and incentive plans and liaison with the company's general counsel and independent auditors.
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