Selection Process— PennantPark Investment Corporation has identified several criteria that they believe are important in identifying and investing in prospective portfolio companies. We use our experience and access to market information to identify investment candidates and structure investments quickly and effectively. Prospective portfolio companies should meet the following standards:
- Value orientation
- Positive cash flow
- Experienced management and established financial sponsor relationship
- Strong and defensible competitive market position in industry
- Viable exit strategy
PennantPark invests in established companies with experienced management teams that have the incentives and sponsorship in place to generate success for both the company and the investor. Additionally, we invest in companies whose business models and expected future cash flows offer attractive exit possibilities. These companies include candidates for strategic acquisition by other industry participants and companies that may repay our investments through an initial public offering of common stock or another capital market transaction.
PennantPark's due diligence includes reviews of historical and prospective financial information; on-site visits; interviews with management, employees, customers and vendors of potential portfolio company; review of senior loan documents; background checks; and research relating to the company's management, industry, markets, products and services and competitors. Once this foundation has been laid, we develop a unique investment structure designed specifically for the portfolio company.
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