Sterling Partners Investment Thesis Challenge (SPITC) November 2011 - - PowerPoint PPT Presentation

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Sterling Partners Investment Thesis Challenge (SPITC) November 2011 - - PowerPoint PPT Presentation

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Sterling Partners Investment Thesis Challenge (SPITC) November 2011 STERLING PARTNERS: FIRM EVOLUTION Then: 1984 Now: 2011 Four entrepreneurs Total staff = 75 Six funds and ~$5 billion 1 in AUM No funds Technology and a

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Sterling Partners Investment Thesis Challenge (SPITC)

November 2011

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

STERLING PARTNERS: FIRM EVOLUTION

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Now: 2011 Then: 1984

  • Four entrepreneurs
  • No funds
  • Technology and a business plan
  • Passionate and creative
  • Total staff = 75
  • Six funds and ~$5 billion1 in AUM
  • 30 portfolio companies
  • Passionate and creative
  • 1. Includes Sterling investments across seven institutional funds and co-investments
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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

STERLING PARTNERS: FIRM OVERVIEW

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Who We Are 25+ year history and entrepreneurial background ~$5 billion of AUM across institutional funds and co-investment program1 Top quartile performance in small and mid-market control funds What We Do Business model investors with an “all seasons” strategy Pre-eminent investor in education Pursue similar business models in healthcare and business services How We Do It Differentiated operational approach to building businesses Dedicated resources in human capital, finance, operations, strategy, and governance Experienced and large team

(1) AUM = unrealized net asset value of our institutional funds plus uncalled committed capital plus the unrealized net asset value of co-investments in existing portfolio companies

Proven, operationally focused team with top-tier returns

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

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STERLING PARTNERS: SECTOR EXPERIENCE & AREAS OF FOCUS

Historic success and experience in our core sectors has driven our business model focus and investment strategy

Education Healthcare Business Services Experience 20+ yrs Experience 20+ yrs Experience 20+ yrs # of investments1 13 # of investments1 14 # of investments1 19

(1) Does not include pre-institutional fund investments as well as 12 investments classified as “Other” (e.g., specialty manufacturing, information services)

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CONFIDENTIAL INFORMATION

NEW INVESTMENT: PACIFIC INTERPRETERS

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Business Model Market The Target Post-Close Strategy Explain why the market is attractive for investment Outline the value proposition Explain why the target company and team you have selected are promising Outline your post-close strategy to win

Investment Thesis

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CONFIDENTIAL INFORMATION

INVESTMENT THESIS: KEY ELEMENTS

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Investment Thesis Overview

  • Why the Industry
  • Long term trends
  • Market size & breakdown
  • Market growth
  • Growth drivers
  • Industry dynamics
  • Why the Business Model
  • Business model characteristics
  • Map the market & value chain
  • Addresses key pain point
  • Fits PE model
  • Targets exist
  • Why Now
  • Timing impetus
  • Market impetus
  • Path to invest
  • POV on market evolution
  • Post Closing Strategy to Win
  • Operational value adds
  • Strategy
  • Human Capital
  • IT
  • Governance
  • Other value adds

Sample Long Term Trends

  • Population changes
  • Compliance and risk management
  • Suppressed natural gas prices
  • Environmental sustainability
  • Aging infrastructure

Sample Business Model Characteristics

  • Platform capable of high growth
  • Sustainable and scalable
  • Differentiated strategy
  • Recurring revenue
  • Attractive exit alternatives
  • Low customer concentration
  • Opportunities for operational improvement
  • Entrenched customers (e.g. stickiness)
  • Defensible position/barriers to entry
  • Profitable and positive cash flow
  • Operating leverage
  • Minimal adoption risk
  • High value proposition
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CONFIDENTIAL INFORMATION

APPENDIX

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

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Experienced team

Mike Drai

Vice President

Matt Hankins

Vice President

Philip Alphonse

Principal

Javier Arrechea

Business Development, Latin America

Brennan Barthelemy

Principal, Talent Acquisition

Steve Chang

Principal, Strategy

John Ebersole

Principal, IT

Avi Epstein

Vice President, Legal Affairs

Alberto Garcia

Director, Firm Strategy & Operations

Daniel Hosler

Principal

Brandon Labrum

Vice President

Eric Becker

  • Sr. Managing Director

Doug Becker

Special Limited Partner

Rick Elfman

  • Sr. Managing Director

Chris Hoehn-Saric

  • Sr. Managing Director

Fran Beard

  • Assoc. Director,

Procurement

Scott Glickson

Director, PCAT

Mats Lederhausen

Operating Partner

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

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Experienced team

Alan Macksey

Managing Director

Kevin McAllister

Principal

Bob Michelson

Operating Partner

Kim Vender Moffat

Principal

Sam Morasca

Operating Partner

Ricardo Prado

Vice President

Beth Rahn

Associate, Investor Relations

Garrick Rice

Managing Director

Daniel Reisner

Principal

Daniel Rosenberg

Managing Director

Jason Rosenberg

Principal

Jeff Schechter

Managing Director, CFO

Julie Stacey

Director, Talent Acquisition

Tom Wippman

Managing Director and General Counsel

Shoshana Vernick

Principal

Steven Taslitz

  • Sr. Managing Director,

Chairman

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

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Education portfolio › Ashworth: post-secondary and career-oriented distance education › Connections: operator of “virtual schools” under state contracts › Educate: provider of branded education services (e.g., Sylvan Learning) › Educate Online: online provider of live tutorial instruction › InfiLaw: consortium of independent, community based law schools › Laureate: global provider of for-profit, post-secondary education services › Meritas: network of proprietary K-12 schools › School of Rock: national provider of performance-based music education › Progressus: school-based and early intervention therapy services

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

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Healthcare portfolio › Active Day: network of adult care facilities › Ameritox: specialty toxicology laboratory › Artromick: provider of medication management services and technology › Centerre: post-actue care rehabilitation hospitals › First Choice: Network of free-standing emergency rooms › Foundations Recovery Network: provider of behavioral healthcare svcs › Pacific Interpreters: provides interpreting services for healthcare › Paradigm: provider of managed care services for catastrophic injuries › Remedi: regional long-term care pharmacy › Rittenhouse: owner and operator of senior housing facilities

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CONFIDENTIAL INFORMATION CONFIDENTIAL INFORMATION

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Business services / other portfolio › Avectra: provider of membership management software solutions › Continental Case: provider of refrigeration refurbishment services › Cornerstone Records: full service record and information management co. › Foundation Partners: provider of end-of-life transition services to families › GEM: provides de-gassing, vapor control and water treatment services › io: designs, builds and operates data centers › Livingston: provider of customs brokerage, transportation, and logistics svcs › Optimer Brands: builds companies with unique textile technology › Prospect Mortgage: retail mortgage consolidation business › SAVO: provider of sales enablement solutions › SecureNet: provider of credit and debit card processing