Radiant is focused on partnering with differentiated businesses that can benefit from our extensive industry knowledge and decades long experience.
Consistent with our core investment principles and business strategy, we expect to identify high-quality companies that have a number of the characteristics enumerated below. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to complete our initial business combination with a target business that does not meet all of these criteria. We will seek to acquire companies that have the following characteristics:
Simple, predictable, and free-cash-flow-generative.
We will generally seek companies with a proven track record of growth and free cash flow generation, and predictable future financial performance that we expect will generate strong, sustainable growth in cash flows over the long term—however, we are open to considering a company that may, at the time of the initial business combination, be cash-flow negative, if we believe that the business’s cash flow will become positive within a reasonable amount of time;
Formidable barriers to entry.
We will seek companies that have long-term sustainable competitive advantages, significant barriers to entry, or “wide moats” around their business, and low risks of disruption due to competition, innovation or new entrants;
Limited exposure to extrinsic factors that we cannot control.
We will seek companies that are not materially affected by macroeconomic factors, commodity prices, regulatory risks, interest rate volatility, and/or cyclical risk;
Strong balance sheet.
We will seek companies that are conservatively financed relative to their free-cash-flow generation, after taking into consideration the de-leveraging effects of the initial business combination;
Exceptional management and governance.
We will seek companies that have trustworthy, talented, experienced, and highly competent management teams. These companies may be led by entrepreneurs who are looking for a partner with our expertise to execute on the next stage of their growth. For target companies that require new management, we will leverage PSCM’s experience in identifying and recruiting new management.
Minimal capital markets dependency.
We will seek companies that can benefit from being a public company with broader access to the capital markets and greater governance, but will prefer companies that are not highly reliant on the capital markets to operate and grow their businesses;
We will seek companies with large enterprise values and significant long-term growth potential that will be likely candidates for inclusion in the S&P 500 index;
We will seek companies at an attractive valuation relative to their long-term intrinsic value; and