Nexos invests principally through privately negotiated transactions. Nexos employs two general strategies for investment: Cornerstone (“roll-ups”) and Growth Capital.
In the Cornerstone Strategy, Nexos initially seeks to identify a “cornerstone” company with outstanding management and business prospects that can serve as a platform for industry consolidation in the region. Nexos conducts intensive research with the platform company management in advance of the initial investment to identify a series of potential acquisitions that would be attractive and benefit from superior management and access to capital. In conjunction with this strategic plan, Nexos works with management to establish bank borrowing facilities which can facilitate acquisitions as well as meet working capital and capital expenditure requirements.
Under the Growth Capital Strategy, Nexos seeks to invest in smaller companies that have superior potential for organic growth. These may include certain companies that are not fully capitalizing on their opportunities to serve their respective markets. Such investments can include early stage formation capital where an industry sector appears particularly promising or the path to profitability relatively short.
In many cases, rapid scaling of a portfolio company’s business will involve a combination of Cornerstone and Growth Capital strategies. Nexos strategy relies on conservative capital structures and modest leverage that would not constrain a company’s growth.
Nexos will draw on both its extensive network and that of its Strategic Advisory Board, as needed, to find management personnel who can enhance the performance of its portfolio companies.