We believe in a decentralized, “light touch” structure with a small, but experienced head office. The leadership teams within our businesses are empowered to drive those businesses. Naturally, we look for strong management teams and work creatively to align the interests of management with their shareholders. When we acquire companies, we strongly prefer successful management teams to stay closely involved post-acquisition and we strive to align ongoing management rewards with shareholder value creation.
While we are "light touch", we are not passive. We strive to add value based on our experiences and perspective, for example by applying expertise to change a business model. We work with a company’s management to:
- Ensure that their strategies are appropriately ambitious :: vertical/horizontal/geographic
- Assist them with capital management and “bolt-on acquisitions”
- Ensure that companies have a strong talent agenda - developing our people today, for the challenges of tomorrow
dmgi typically invests in data and analytics focused companies providing must-have information by combining large databases with software analytics and the resulting products delivered to business customers in largely electronic formats. Companies that we look to invest in will have all or almost all of the following characteristics:
- Operate in attractive b2b markets with an extended runway for high rates of organic growth
- Have differentiated content and/or analytics
- Are highly valued by their customers and
- Are market leaders or have the clear potential to become leaders
- Have strong, growth focused and creative management
- Will benefit from DMGT’s long term perspective
- Operate internationally or have the potential to do so
- Financial criteria (applies mostly to acquisitions):
- Cash generative
- 3+ years of operating history
- Have demonstrable ability to achieve sustained double digit top-line growth
- High margin or the clear opportunity to become so
- Growing Free cash flow
We are attracted to both "bolt-ons" to our existing companies as well as new, stand-alone companies. We are open to investing at various stages in a company's lifecycle. We prefer not to invest in very early stage, pre-revenue companies unless closely aligned with our companies' operating activities, as we prefer companies which have demonstrated an initial proof of concept by having clients and revenues and if not profits at least a clear path to profitability. We typically invest for control, but are flexible about how we get there, ranging from taking a minority equity stake to outright purchase. We are willing to take minority stakes in early stage companies in sectors which are new but of interest to us, or if they are of strategic interest to one of our existing companies.
Mature businesses are of interest if they can be rolled into an existing group company, or if a management team comes to us with a vision for transforming such a company's performance. We continue to be especially attracted to opportunities in the real estate, energy and educational information sectors. We are also actively looking to expand into new sectors such as Healthcare and Agricultural Information and welcome receiving investment proposals.