About Us > Our Criteria
Our Criteria
As a general rule, our threshold determination is based on the following core metrics:
Baseline Enterprise Value
Baseline EBITDA< 5 - "Baseline" Enterprise Value (EV) means the sum of the company's current market cap and long-term debt less the sum of the company's cash and cash equivalents and probable cash proceeds, if any, from the sale (and leaseback, if applicable) of fee real estate.
- "Baseline" EBITDA means a company's EBITDA for the trailing four reported quarters adjusted to add back appropriate non-recurring charges and deduct the probable rent, if any, from the company's sale (and leaseback, if applicable) of fee real estate.
Premium Enterprise Value
Baseline EBITDA< 6 - "Premium" EV means the sum of the company's current market cap (multiplied by 150% to reflect a 50% premium to market) plus debt less the sum of the company's cash and cash equivalents and probable cash proceeds, if any, from the sale (and leaseback, if applicable) of fee real estate.
- Products and services that present a compelling and sustainable competitive advantage.
- Growing market opportunity.
- Vast majority of outstanding shares in the hands of shareholders who are not active in the business, thus are entirely dependent upon a steadily increasing market cap to achieve a return on their investment.
- Underperformance attributable to one or more problems we believe we can solve.