OPERATING COMPANIES

The first of Unio’s two businesses is to invest in and acquire operating companies. The objective is twofold.

•  To make good investments in their own right.
•  To optimize long-term operating performance.

Legally these are acquisitions. But in spirit, Unio views them as partner-companies with two main jobs. Job 1 is to take care of their own businesses. Job 2 is to contribute to making Unio greater than its parts.

Our intent is to have majority control of these acquired companies, with significant co-ownership by ongoing management and, if it makes sense, by former owners.

Partner-companies may be private or public. Each partner-company Unio buys will operate as a direct subsidiary of Unio.

Unio’s preference is to pay for acquisitions in cash or, if Unio is public, in stock and cash. For investment purposes, Unio assumes that debt will not be used. If it is, debt will be at modest levels.

We want partner-companies to demonstrate eight “foundation attributes”.

•  Good business economics: by operating in marketplaces characterized by profitable and time-tested economics that have a long-term future.

•  Customer connectedness: by having strong bonds with their customers – preferably because they are seen by their customers as continuously delivering value.

•  Respect for culture: showing in their actions that they understand culture’s importance and having cultures broadly compatible with Unio’s.

•  High quality people: from the top down and evidenced by the substance and straightforwardness of their conduct.

•  Operational effectiveness: through a clear ability to carry out their basic business functions well.

•  Free cash flow production power: after capital needed to run the company in a first-class way.

•  Optimizability: through easy to understand ways in which Unio can add value.

•  A sensible price: that makes an investment and continuing relationship beneficial  to all.