Fundamental business improvement is the foundation of our investment strategy. We invest in market-leading companies that are typically underperforming. Often, but not exclusively, our portfolio businesses are distribution- or services-related. Rather than pursuing specific industry segments, we concentrate on companies with broad “spread of risk” characteristics, such as large customer and supplier bases and diverse revenue streams. In all cases, we only invest where significant value can be created through operating performance improvements.

Case Studies in Complexity

CD&R investments frequently involve substantial complexity. This complexity may take the form of challenges associated with the acquisition of large corporate divisions or complicated transaction structures. The vast majority of our investments have been corporate divestitures that involved managing a range of delicate employee, customer or supplier issues, or other matters related to an ongoing commercial relationship with the parent company, or stand-alone businesses in need of strategic repositioning. The post-acquisition strategies pursued by CD&R are designed to enhance business performance.

  • CD&R has successfully partnered with corporate sellers with market leading businesses experiencing a cyclical or performance downturn at the time of our investment. In these situations, CD&R works exclusively with the corporate parent to structure a transaction that transfers control of the division to CD&R while the parent retains a substantial ongoing equity stake in the business. Tyco International and Ingersoll Rand Company are two examples where CD&R’s proven ability to add operational value was decisive in the Firm’s selection as a partner in this type of transaction.
  • In the divestiture of VWR International by Merck KGaA, VWR continued to distribute a significant amount of high-margin Merck-branded products after the sale. As a result, CD&R’s extensive experience with large corporate divestitures and proven operating capabilities were critical considerations for the seller.
  • In the case of Sally Beauty, a leading specialty retailer and distributor of beauty supplies, CD&R demonstrated its ability to handle structural complexity. Sally was acquired as part of an innovative $3 billion recapitalization of Alberto-Culver, enabling the parent to create significant shareholder value.
  • With Brakes, a U.K.-based foodservice distributor, the family that controlled the company selected CD&R to take the business to the next level of profitable growth. Under our ownership, the company’s profits grew 70% as a result of a number of CD&R-led initiatives to expand margins, reduce costs, restructure operations and integrate acquisitions, all of which helped to make Brakes one of Europe’s leading broad line foodservice distributors.

The CD&R Difference

CD&R’s investment focus, the composition of our professional base and the structure of our processes all serve to support this strategy of value creation through operating improvement.

  • Value created through operational improvement. We believe that an investment approach based on operating improvements represents the most effective method of achieving consistently attractive risk-adjusted returns. The Firm differentiates itself through its ability to identify and drive initiatives that create long-term value. View video
  • Focused sourcing model positions CD&R for differentiated deal flow. Because of the Firm’s clearly defined investment focus and its strategy to invest in a limited number of transactions, CD&R builds a targeted pipeline of potential investments particularly suited to our operating capabilities and commits significant resources to sourcing these investments over a multi-year timeframe. View video
  • Disciplined and clearly defined investment focus. CD&R focuses on businesses that are fundamentally well positioned, that have broad “spread of risk” characteristics, and in which the Firm can identify and drive returns through “controllable” operating improvements and transformation. View video
  • Conservative capital structures. In financing our portfolio companies, we want to ensure that management always has the balance sheet flexibility to execute long-term business building strategies even in challenging times. View video

Note: For a complete list of new investments since 2001, see our Investments.

Fundamental business improvement is the foundation of our investment strategy. We invest in market-leading companies that are typically underperforming. Often, but not exclusively, our portfolio businesses are distribution- or services-related. Rather than pursuing specific industry segments, we concentrate on companies with broad “spread of risk” characteristics, such as large customer and supplier bases and diverse revenue streams. In all cases, we only invest where significant value can be created through operating performance improvements.

Case Studies in Complexity

CD&R investments frequently involve substantial complexity. This complexity may take the form of challenges associated with the acquisition of large corporate divisions or complicated transaction structures. The vast majority of our investments have been corporate divestitures that involved managing a range of delicate employee, customer or supplier issues, or other matters related to an ongoing commercial relationship with the parent company, or stand-alone businesses in need of strategic repositioning. The post-acquisition strategies pursued by CD&R are designed to enhance business performance.

  • CD&R has successfully partnered with corporate sellers with market leading businesses experiencing a cyclical or performance downturn at the time of our investment. In these situations, CD&R works exclusively with the corporate parent to structure a transaction that transfers control of the division to CD&R while the parent retains a substantial ongoing equity stake in the business. Tyco International and Ingersoll Rand Company are two examples where CD&R’s proven ability to add operational value was decisive in the Firm’s selection as a partner in this type of transaction.
  • In the divestiture of VWR International by Merck KGaA, VWR continued to distribute a significant amount of high-margin Merck-branded products after the sale. As a result, CD&R’s extensive experience with large corporate divestitures and proven operating capabilities were critical considerations for the seller.
  • In the case of Sally Beauty, a leading specialty retailer and distributor of beauty supplies, CD&R demonstrated its ability to handle structural complexity. Sally was acquired as part of an innovative $3 billion recapitalization of Alberto-Culver, enabling the parent to create significant shareholder value.
  • With Brakes, a U.K.-based foodservice distributor, the family that controlled the company selected CD&R to take the business to the next level of profitable growth. Under our ownership, the company’s profits grew 70% as a result of a number of CD&R-led initiatives to expand margins, reduce costs, restructure operations and integrate acquisitions, all of which helped to make Brakes one of Europe’s leading broad line foodservice distributors.

The CD&R Difference

CD&R’s investment focus, the composition of our professional base and the structure of our processes all serve to support this strategy of value creation through operating improvement.

  • Value created through operational improvement. We believe that an investment approach based on operating improvements represents the most effective method of achieving consistently attractive risk-adjusted returns. The Firm differentiates itself through its ability to identify and drive initiatives that create long-term value. View video
  • Focused sourcing model positions CD&R for differentiated deal flow. Because of the Firm’s clearly defined investment focus and its strategy to invest in a limited number of transactions, CD&R builds a targeted pipeline of potential investments particularly suited to our operating capabilities and commits significant resources to sourcing these investments over a multi-year timeframe. View video
  • Disciplined and clearly defined investment focus. CD&R focuses on businesses that are fundamentally well positioned, that have broad “spread of risk” characteristics, and in which the Firm can identify and drive returns through “controllable” operating improvements and transformation. View video
  • Conservative capital structures. In financing our portfolio companies, we want to ensure that management always has the balance sheet flexibility to execute long-term business building strategies even in challenging times. View video

Note: For a complete list of new investments since 2001, see our Investments.