WCAS believes that the most proven method for increasing equity
value is operational growth of companies. Since 1998, over 90% of
our investment returns in our two target industries were generated
by portfolio company operational growth. WCAS believes that
operating growth not only drives value creation in private equity
but also provides the flexibility to be opportunistic in exiting
investments and mitigates the risks in challenging economic
All WCAS portfolio companies follow a standard operating cycle,
which facilitates a consistent monitoring of portfolio company
performance. In addition, Value Maximization Plans ("VMPs") are
developed for each new investment by our Investment Professionals,
Resources Group and portfolio company management teams. These VMPs
are unique for each portfolio company and encompass a wide range of
strategic initiatives, including revenue enhancement and cost
management strategies; corporate governance; key management team
members and incentives; financial reporting dashboards as well as
potential acquisitions and integration timelines.
WCAS capitalizes our portfolio companies to pursue growth
initiatives by providing financial flexibility through relatively
lower leverage levels. As of December 31, 2012, the debt to EBITDA
ratio for the WCAS portfolio of companies is 4.0 times. Thus, our
portfolio companies are well capitalized for growth and can weather
various economic environments.
WCAS is also actively involved in the corporate development
acquisition programs of our portfolio companies. The WCAS network
of relationships generates significant deal flow for our portfolio
companies, and our expertise in negotiating and financing these
acquisitions adds value to our investments.
WCAS's strategy of providing value-added operational focus to
our portfolio companies, supplemented by strategic acquisition
programs, has served as the catalyst for superior value creation
for our investors.