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| 1 |
What
is a typical investment size? |
| A |
Our
investments span a wide range of sizes and types. We are comfortable
investing from $60 million to $600 million in a given transaction.
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| 2 |
In
what industries does TA like to invest? |
| A |
We
have historically invested in companies in the technology, healthcare, financial
services, consumer and business services industries. We are, however,
open to review opportunities in any profitable, growing company. |
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| 3 |
What
stage investment is preferable at TA? |
| A |
We
prefer to invest in companies which are profitable and growing at
least 15% per year.
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| 4 |
Does
TA like to be a lead investor? Will TA co-invest with others? |
| A |
TA
prefers to be the lead investor but often invests with other investment
firms, strategic investors and angel investors. We will work with
the company to build the proper shareholder base.
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| 5 |
Does
TA prefer to have operating control of the company? |
| A |
TA
will purchase ownership control of the company, but
never takes operating control. Again, we seek to back strong management
teams who run their companies on a day-to-day basis.
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| 6 |
What
is TA’s geographic preference? |
| A |
Our
focus is on profitable, growing companies based in North
America, Europe, India and other emerging markets. However, we will consider attractive opportunities
in other parts of the world. |
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| 7 |
How
long does it take to close an investment? |
| A |
We
have developed a process that enables us to move as quickly as
needed to close an investment. Typically, we can issue a commitment
within 30 days and close the legal documents within an additional
30 days thereafter.
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| 8 |
Who
makes the investment decision? What is the process? |
| A |
We
establish four or five person teams for each new investment opportunity.
Two members of the team lead this effort and are responsible for
all due diligence related to the investment. While the investment
team solicits input from other TA investment professionals, the
final investment decision is made solely by these four or five individuals.
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| 9 |
How
does TA work with a company after closing the investment? |
| A |
The
typical TA investment has four to five formal board meetings a year,
but this is largely determined in partnership with management. We
encourage the companies in which we invest to use our services whenever
needed, and we talk to our management teams regularly on a wide
range of issues. Unlike many other firms, we do not charge for our
services.
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| 10 |
How
does TA work with management as a Board member? |
| A |
We
remember that outstanding companies are built by great executives,
not great investors. Management teams run their companies, and we
act as a partner with management. We provide assistance in many
areas, including strategy, financings, acquisitions, management
recruiting and partnering/liquidity opportunities.
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| 11 |
What
is TA’s holding period for an investment? |
| A |
Our
holding period has averaged five years over the last 15 years. The
TA funds are raised with 10 to 12 year legal lives so we are, by
nature, a long-term investor.
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| 12 |
Is
your preferred exit route an IPO or a merger? |
| A |
We
have no preferred exit. Many of our portfolio companies have chosen
to complete IPOs over the past several years, but we have extensive
experience helping the companies in which we invest with both IPOs
and sales/mergers as paths to liquidity.
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| 13 |
Is
TA an alternative to an IPO? |
| A |
In
the short term, TA is an attractive alternative to an IPO. First,
we can provide substantial liquidity to shareholders while an IPO
will likely preclude significant selling. Remaining private may
also give you the opportunity to round out your management team
and hone your strategy before testing the public market. If you
choose to go public later, we will help you put the processes in
place to be a successful public company. We can also be very helpful
with introductions to investment bankers, potential board members
and other parties to maximize the opportunity for a successful public
offering.
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| 14 |
How
does TA differentiate itself from other investors? |
| A |
TA pursues
a very different strategy than other private equity firms.
We
are not a venture capital firm; our focus is on companies that
are profitable at the time of our first investment. Similarly,
we are not a traditional leveraged buyout firm, because we do
not always own majority positions in our portfolio companies.
We have developed deep expertise in a select group of industries,
and we work actively with management to build value. We have
extensive
industry and financial contacts, built over 40 years through
our investments in nearly 400 rapidly growing companies.
Our willingness
to purchase minority positions in management-owned companies is
highly unusual in our industry. We are very comfortable with this
approach because we understand that it is the role of management,
not the board or the investors, to run the company on a day-to-day
basis. We apply this approach to all of our investments, even
those where we have purchased a majority position. |
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| 15 |
Why
does TA have a subordinated debt fund? |
| A |
TA has raised
subordinated debt funds to simplify the process of completing leveraged transactions. These funds enable
us to provide two layers of the capital structure in a transaction.
Senior lenders find this to be attractive, and we can complete
transactions more quickly and raise senior debt on more favorable
terms as a result. |
| 16 |
How
did the firm’s name, TA Associates, come about? |
| A |
TA Associates
was originally a separate partnership formed in the late 1960s
affiliated with Tucker, Anthony & R. L. Day, which was a New
England-based regional brokerage firm. TA has been a separate
partnership owned by its General Partners since 1978.
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| 17 |
What
is a minority recapitalization? |
| A |
A minority
recap is defined as the use of some senior bank debt and equity
(and perhaps subordinated debt) from TA Associates to provide
liquidity to shareholders in return for less than 50% ownership
of equity in the company.
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| 18 |
What
should I look for in an investor? |
| A |
We believe
you should look for industry expertise, investment experience,
deep pockets of capital and a personal relationship that works.
Most private equity investors will value a company within 10%-15%
of each other, so qualitative factors should be very important
in your decision. You will be selecting a business partner, and
you should feel very comfortable with the individual and firm
you choose for this critical relationship.
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