i4hi - the entrepreneurial investor
i4hi differentiates itself from other investors by being an entrepreneurial partner with its portfolio companies and their management teams. We intensively support the company in defining and achieving the financial and operational improvement objectives, typically through participation in the executive board or management team. Through this approach we provide new strategic and operational means of improving the business.
This co-entrepreneurial approach is particularly suitable for carve-out situations (for example, a spin-off business unit from a large company), ownership or management succession, management buy-out/buy-in situations, or implementations of significant change programmes in order to achieve growth and/or bottom-line improvements.
The i4hi approach focuses on analysing and realising the improvement potential in its portfolio companies. Together with the existing talent in the company, strategies are developed and implemented. The skills and experience of the i4hi team complements the existing sector and technical expertise in order to take the company to the next level. i4hi support, in particular during the first phase of participation, is mostly structured through management participation of one of the i4hi partners. Through this intensive cooperation, i4hi can experience the strengths and dynamics of the company and, consequently, can generate fresh perspectives:
* broader view of the company’s
potential within its strategic
* extra expertise and manpower to
implement improvements at a
strategic level and in routine
* introduction of an entrepreneurial
spirit focussed on getting things
Suitable approach for non-standard situations
Most private equity investors focus on larger investment targets and tend to avoid complex situations, as these are perceived as being too risky. However, in many situations, significant value creation can be achieved, provided that there is extra strategic, financial and commercial support, combined with organisational restructuring. It is in these situations that the i4hi approach is most effective.
Investment commitment and horizon
The i4hi partners always invest with their own capital and make their own investment decisions. In the case of larger financial commitments however, i4hi is closely allied to certain other private equity investors. i4hi does not work with fund structures and is therefore flexible with regards to its exit strategy. If investments continue to provide good value creation potential, i4hi is not under pressure to withdraw. Rather, it can choose to continue with companies that it knows well (for example, i4hi has been the majority shareholder of Resin-Yparex for more than ten years).
i4hi has a strong track record in manufacturing and technical businesses, such as in plastics, chemicals and lighting. Technical trading businesses are also included in i4hi’s scope.
i4hi looks for companies that have distinctive products or processes, that boast a unique position within their sector/niche.
i4hi typically invests in companies with a turnover of more than €10 million per year, an EBITDA larger than €500k and 15 to 100 employees.
i4hi focuses on companies whose headquarters are based in the Netherlands, preferably with international business exposure and/or opportunities.
i4hi is not averse to complex situations. Part of its added value is to deal with complexities such as carve-outs, strategic repositioning and organisational restructuring.
Investment opportunities with enterprise valuations of up to €10 million and required equity stakes of up to €2 million are financed by the i4hi partners themselves. In the case of higher equity stake requirements, i4hi cooperates with equity partners within its network.
i4hi prefers majority stakes in its portfolio companies. In some cases, however, a minority stake is possible, for example as part of a two-staged succession approach, where the former ownership is phased out. In all situations, a clear mandate for the developed strategy is required.
In early 2006, i4hi acquired the plastics factory of Hartman Outdoor Products in Enschede by means of a carve-out. The factory was split into two separate businesses: large size injection moulding (EKF) and plastics compounding (Resin).
During the first few years, Resin invested significantly in state-of-the-art infrastructure, an experienced and innovative team, and the professionalisation of its business culture. As a result, Resin developed into a niche supplier of environmentally-conscious products, such as halogen-free, flame-retardant compounds; polyolefin-based substitutes for PVC and bitumen; and near-to-prime, recycle-based compounds. Among its customers, Resin serves a number of leading global chemical companies as well as many smaller, innovative plastics converters.
Over the past few years, revenue and profitability have improved significantly. Resin is now investing in the next phase of growth through product innovation and international expansion. A new plant in Jakarta, Indonesia, was opened in 2015.
Eco-Care serves the automotive industry with the recovery of engineering plastics from their composite waste. The company operates advanced separation technologies that offer superior recycling results. i4hi bought the company out of bankruptcy in 2009 and later sold the business to Entsorgungsgesellschaft Niederrhein (EGN), a large German waste management company.