Types of Investments

Venture Capital
Northwood makes and frequently leads venture capital investments in privately held companies that are in the early through later stages of development, and to a limited extent in start-up opportunities. Prospective companies should demonstrate the potential to become industry-leading enterprises with significant revenues, earnings, and cash flow.

Buyouts
Northwood participates in management buyouts and recapitalizations of established middle-market companies that have relatively long histories of successful revenue and earnings growth. We seek companies (or divisions of larger companies) that have strong management teams, and are leaders in niche markets, with attractive profit margins and predictable cash flows. Opportunities to enhance value through internal expansion, add-on acquisitions, or productivity enhancements are of particular interest to us.

Industry Consolidations
Northwood backs outstanding management teams that we believe can successfully acquire numerous small companies in highly fragmented industries. These leveraged consolidations enable a “platform” company to benefit from economies of scale, operating efficiencies, a high quality management team, and enhanced brand awareness.

Special Situations
Northwood’s ability to react quickly along with its flexible and creative investing style allows us to invest in many non-traditional transactions. We have an opportunistic investment philosophy and seek to find unique opportunities that others might consider “out of the box”. Examples of the breadth of special situation investments that Northwood has made and will consider include:

• Financing a company that was emerging from bankruptcy with a new business plan and management team;
• Quickly funding a management team that had an acquisition lined up but lost a source of funding at the last minute;
• Providing capital to complete a buyout identified by a fundless sponsor;
• Buying a division of a larger company that was marginally profitable because of the overhead burden and lack of vision;
• Providing growth capital to a private equity backed company that did not want to go through a complete fundraising or auction process;
• Backing a proven executive who desired to acquire and grow companies in an industry where he had substantial knowledge and contacts; and
• Partnering with another private equity group to fund a buyout as a result of a failed auction process.