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Investment Strategy
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PRIVATE EQUITY

IN SUMMARY

Target Sectors
• Industrial
• Business Services
• Consumer
• Healthcare
• Energy

Target Equity Investment
• $50 - $200 million

Deal Criteria
• Leading market positions
• Innovative products or services
• Strong management teams
• Multiple avenues for growth
• Sustainable value proposition

Geographic Criteria
• United States
• Canada
• Mexico
• UK and Western Europe
• Eastern Europe
• Russia
• Middle East
• India
• China

INVESTMENT STRATEGY

Overview
Arcapita's private equity team operates out of its offices in Atlanta, London and Bahrain. Arcapita acts as a principal and arranger in the acquisition of controlling and non-controlling interests in established companies throughout the world with an emphasis on the United States, Europe, the Middle East and India, targeting growth-oriented private equity acquisitions with a total transaction value between $50 and $500 million. Arcapita looks for companies that have innovative products or services, leading market positions, and strong management teams capable of building shareholder value.

Transaction Review
Arcapita focuses on five target sectors where it has built up industry knowledge and a successful track record:   healthcare, energy, business services, industrial and consumer sectors. Under some circumstances, the Bank will consider acquisitions across other industry sectors where opportunities emerge.
 
Arcapita looks for companies which score highly in a number of important areas. They should have innovative products or services, leading market positions and strong management teams capable of building shareholder value; a sustainable value proposition due to market strength in product line, technology, distribution, manufacturing, or brand; a clear business strategy with multiple avenues for growth and market share gains; industry growth drivers that are fundamental and compelling; experienced management motivated through equity incentives and co-investment; and exit potential through a financial or strategic sale, or initial public offerings.

Deal Structure
Private equity acquisitions are typically funded with a combination of equity and Islamically acceptable financing. Arcapita underwrites the equity portion of each acquisition using its own financial resources and, where the target company's capital structure allows, arranges non-recourse financing from leading financial institutions. A majority of the equity in each investment is then placed with the Bank's investor base.

Portfolio Company Management
Arcapita's private equity team and Portfolio Management Group work closely with each portfolio company management team in establishing a clearly defined business plan for creating equity value, while designing a tailored capital structure and management equity incentives to foster growth and profitability. Once the business plan is established, Arcapita's investment professionals monitor the investment at the company board level, working with the management of the company to address the needs of the business.

Exiting the Deal
Arcapita's aim is to nurture and grow the investments through the holding period with strategic and financial support when necessary, and at the appropriate time, to position the company for sale to a financial or strategic buyer, or through an IPO.



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