What type of company are we looking for?
COMPANIES that
Are Profitable
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At least BRL 15mm of EBITDA
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An EBITDA margin of 15%
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Are Growing
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Growing and recurring revenues
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Historic and positive growth
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Have High Returns on Capital
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Low need for additional investments
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Business has high returns on capital
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in industries with
Positive Dynamics
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Historic positive growth
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High growth potential
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Fragmented market or Target company is the leader in a concentrated market
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Low Risk
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Low regulatory risk - regulation won't erase industry
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Low disruption risk - industry future is predictable
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Low cyclicality - stable demand x supply relationship
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Price stability
That ALSO have
Quality middle management in place
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Company and seller have a strong reputation
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Industry is positive to long-term trends such as digitalization, aging population, energy conservation amongst others
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Identifiable barriers-to-entry
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Clear identifiable for opportunities for value creation
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These are some of the more detailed criteria that we look for when making investment decisions
