General Investment Criteria

Charterhouse Group seeks to invest in established middle-
market businesses with enterprise values between $75 million
and $300 million through a variety of private equity transactions. While our concentration is on buyouts and build-ups, we will also pursue growth capital financing opportunities. Our firm will always consider a prospective platform investment where the enterprise value is initially less than $75 million if a company is suited for rapid growth through a build-up strategy (where add-on acquisitions are identifiable and achievable within the specific industry). Furthermore, in select instances we will participate in larger transactions through co-investments with our limited partners, strategic corporate partners or with other financial investors where our firm is able to utilize one of our Charterhouse Entrepreneurs (see Charterhouse Entrepreneur Program) to play a significant management or board director role.

Our objective is to invest a minimum of $30 million of our managed capital into each portfolio company over the life of an investment. We will consider opportunities that require equity capital of up to $100 million. Our 'sweet spot' equity range and average investment has recently been between $40-$50 million.

As we assess the value creation potential of any prospective investment, we typically seek the following characteristics:

• A superior, highly motivated management team with a proven track record of success in the same or within a related industry (See Partnership with Management and Charterhouse Entrepreneur Program)
• Favorable industry dynamics that will support revenue and earnings growth
• A leading position in a sizable or rapidly growing and/or shifting market
• Sustainable competitive advantages - such as brand recognition or proprietary products, services, processes or customer relationships
• A scalable business model
• An ability to exert significant board influence or control