Our investment process consists of working closely with the management team to determine how best to build value for the company. While no two transactions are identical, we generally take the following steps when making an investment:

Initial contact and preliminary screening
After the initial contact is made, directly or through an intermediary, we carefully review your business plan, asking as many questions as necessary. Using our expertise and industry network, we are able to quickly and efficiently assess the merit of a business proposal and therefore we can often get back to management teams within a week.

In-depth company review and deal evaluation
We visit the facilities and hold a series of meetings with the management team to gain an in-depth understanding of the key aspects of the business, including its market and customers, competitors, strategy, operations, management, finance and accounting. The Cadent investment team also builds its own financial model to ascertain the valuation and quantify the return potential under various scenarios.

Investment proposal and agreement in principle
Assuming both parties wish to proceed, we submit a term sheet, which includes key elements of the deal structure.

Due diligence and investment strategy definition
Once an agreement in principle is achieved, we engage in a full due diligence effort, often aided by professional firms for legal, tax, accounting, environmental or geological reviews. With your consent, we conduct background checks, contact customers, etc. In parallel, we work closely with management to continue to learn about the business and formulate the investment strategy going forward.

Closing
Together with our respective counsels, we draft and execute the relevant legal agreements. Then we fund the transaction.

Investment strategy execution and monitoring
Throughout the investment life, both Cadent and the management team seek new opportunities to enhance the company's value. Such opportunities may include making accretive acquisitions or expanding into new markets or locations. Cadent maintains regular contact with management, is active at the board level, and provides feedback and assistance on an ad-hoc basis. Our expertise, skills and access to industry relationships are always available to our portfolio companies.

Exit strategy planning
Careful and early planning of the exit is crucial to ensure maximum returns. Options are continually evaluated and the company's strategy may be directed toward building a business which will be highly valuable to a strategic buyer.

Exit
Cadent will assist the management team with respect to a company sale, intial public offering, leverage recapitalization or other exit transaction. By the time Cadent exits the investment, we will have developed a strong relationship with the management team, which in the past has often resulted in backing the team's subsequent ventures.