Value Creation Program
The exceptional value and growth achieved by our portfolio companies is grounded in our rigorous Value Creation Program (VCP), from initial evaluation through ultimate transition. As no two situations are alike, every step of the way is carefully tailored to the situation and unique needs of each seller, management team, company and competitive landscape.
Overview
Linden’s VCP integrates sector-focused strategies, investment theses, and operational priorities into a roadmap designed to ensure that our Linden team, company management, and boards realize the potential in each investment.
We work closely with management during the diligence process to identify the strategic and operational levers in each business. From there, we design a plan with our operating partners and CEOs to accelerate the growth and strengthen the company’s competitive position.
Every Linden investment is entered into with a proprietary VCP in-place, and it is against the VCP’s objectives that progress is measured and supported by the Linden partnership.
“The basic operating tenet within Linden is that while we have an investment horizon, we want to develop a business that is going to endure well beyond that; a growth trajectory that will last well beyond Linden ownership.”
Evaluation
One of the most overlooked determinants of success in creating value for a company is the initial screening. Through our operating partners, resource network and diligent in-house research, we select opportunities to which we can add the greatest value. An essential component of our vetting process is answering the question, “Why is Linden the right owner for this company?” We will not make an investment without a grounded view of how our ownership will help a company thrive.
- We invest primarily in leveraged buyouts or other transactions in which we can be the lead investor or have significant governance influence.
- We target companies with $10-$30+ million of EBITDA.
- We do not make venture capital investments.
- We seek opportunities in which we can partner with management to develop and implement our VCP.
- Example platform investments include: recapitalizations of family-owned and other independent companies, corporate divestitures, and take-private transactions.
Transaction
In executing the transaction, a dedicated team of Linden investment professionals and operating partners work together to align the objectives of the owners and management around a specific Value Creation Program.
The VCP is based on a thorough analysis of the business and agreement on financial and operating goals to be realized over a four-to-seven-year investment period. We tailor each transaction to the seller’s goals while adhering to the long-term interest of the company’s health, concentrating our efforts on initiatives with the greatest potential for positive impact on the business.
Through our firm and our investors, we are able to execute a wide range of private equity transactions, allowing us the flexibility to structure transactions in ways that optimally meet sellers’ needs and goals. Our ideal transaction is one in which the current owner retains a stake in the company, participating in the company’s growth and value creation.
Implementation
The goal of our Value Creation Program is to increase the intrinsic value of a business through active ownership. Upon acquisition of the company, we immediately begin working with existing management to implement the program.
Active Ownership
- Every VCP is proprietary and demands unwavering attention. For every buyout fund company, a dedicated Linden investment/operating team is on the company’s board and remains engaged through our ownership. This active presence allows us to be agile, responsive, and proactive. In addition, our investment/operating team goes on-site during key pre- and post-acquisition stages, evaluating the business, instituting best practices, sharing industry knowledge, and forging partnerships that drive the company’s success.
Shared Resources
- When we acquire a company, it becomes part of the Linden team, benefiting from synergies across our portfolio and our relationships throughout the healthcare industry. Our relationships help secure strategic alternatives for non-core operations, as well as proprietary add-on and partnership opportunities.
“Linden's experience was invaluable. They were instrumental in helping us build a world-class company and in providing us the support and guidance to grow strategically and profitably.”
Governance
Our investment, operating and human resources professionals provide ongoing stewardship through active governance and oversight of our companies. We augment our teams with influential outside directors from within the sector and institute formal board governance programs developed through decades of board-level experience on dozens of portfolio company boards. These programs are designed to work on specific areas throughout the year, from strategic planning to audit and compliance work.
Transition
Exit planning is built into our considerations from day one. We actively maintain relationships with strategic acquirers from targeted healthcare sectors, and we initiate dialogues with these potential acquirers over the course of our ownership. Our goal is to ensure an optimal transition to a new owner and the building of strategic value in the company through its transition and next stage.
Completion of the VCP, the economic environment, and the company’s current equity value are all considered in exit decisions. Our operating partners, corporate relationships, and advisory network are invaluable to this process as we seek to identify the best exit opportunity at the optimal time.
When we commit to growing a company, we commit to its growth well beyond our ownership. When we exit a buyout fund company, we are at the point at which we believe we have secured the fundamentals necessary for a company’s long-term value and health.