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Investment

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  

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. 

Current Owner/ Management

Strong management with owner/manager looking to improve the company and expand markets.

Size

$25 to $100 million revenuesómore if justified.

Product

Simple productsóbasic manufacturing, easily understood, low risk of technological obsolescence, foreign market for the product, sustainable price advantage in foreign markets.

Earnings

Demonstrated consistent earnings.

Market Position

Leaders or near leadership positions in their respective industry segments.

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.

Growth Potential

Robust and growing Chinese market for the product and  sizeable export market.

Location

Located within 2 hours?drive from international airport, with ready access to transportation to ports.

Basic Acquisition Criteria for State Owned Enterprises (SOEs)   

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.

Management

Willing to work with ALC, oriented to value creation/exit, flexible about bringing in new management.

Size

Medium and small.

Earnings

Pro forma positive earnings.

Ownership

Control enterprise or assets, generally with existing management taking incentive equity stake.

Capacity/Capital Investment

Little or no capital investment required.

Exclusions

Idle plants (re-startups).

 

 

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