Investment Process

Kai Capital Management’s objective is the acquisition of majority stakes in medium-sized companies and a long-term development of its investments. We seek to invest in companies which have a turnover of between Euro 5 million and Euro 15 million.

For those types of companies there is usually only a limited number of potential buyers. Selling the business to competing companies (strategic buyers) often entails significant risks both for the manufacturing site and the employees. For private persons that want to take over the operative management in these companies, such acquisitions can also be quite risky (guarantees). Purely financially-driven investors often lack the necessary entrepreneurial expertise or the size of these companies is too small.

A healthy company core business and an established and experienced management are prerequisites for an investment decision. A high degree of concordance between the seller, the management and Kai Capital about the future orientation of the company is the basis for our investment.

Kai Capital Management sees itself as an entrepreneurial and active participant supporting the measures and instruments of change. Kai Capital Management actively contributes to the long-term value creation through its significant management experience.

Kai Capital is focused on acquiring companies within the field of the so-called „old economy“ such as manufacturing companies, but also industrial services companies. These companies should be based in the West of Germany, particularly NRW. However, we strongly support the international development of our portfolio companies.

Kai Capital Management distinguishes itself through a transparent, determined and expeditious investment process. We are free from excessive corporate overheads and, within a week after an enquiry and an initial informational meeting, we are able to decide whether we want to pursue a potential project. Depending upon the complexity, the entire investment process may require anywhere between 3 and 6 months.

Subsequent to an initial informational meeting, we follow up with a visit to the prospective target company’s business premises. Within the framework of further detailed discussions, we decide relatively quickly whether we would like to proceed. We then prepare a detailed proposal covering the relevant issues of a potential transaction as well as our conception with regards to operational issues following the completion of the transaction.

After reaching agreement in principle on the relevant terms of a potential transaction, we will undertake a due diligence review of all pertinent aspects followed by the drafting of a sale and purchase agreement. The possibility to finance an appropriate share of the purchase price – preferably with the seller’s local bank – generally is required for the acquisition.