Frequently Asked Questions
Why was Brook Park Holdings created?
BPH was created to build a legacy portfolio of diverse and uncorrelated businesses over time, compounding the underlying value. Building Brook Park allows us to learn about new complex subjects, see the direct fruits of our labor, and bring other people into the process. Basically BPH is a logical extension of the childhood forts we built in the woods of our neighborhood in Pittsburgh, Brook Park Manor.
How fast can BPH move to close a deal
While our due diligence process is thorough and detailed, we dedicate ourselves to one deal at a time working around the clock to go after higher risk diligence first so no time is wasted on either side. We target 2-3 months from the letter of intent (LOI) to close depending on the complexity of the underlying business.
How does BPH use leverage in their acquisitions?
Goldilocks principle, enough but never get burned. BPH keeps 20-30 lending institutions warm with deal status and search parameters so we can line up the right financing strategy and lending institution as a first step in the acquisition process. These institutions include traditional senior banks, mezzanine lending institutions, SBIC funds, and SBA financing groups. The amount of leverage is highly dependent on perceived risk in the underlying business. BPH applies strict risk management parameters when determining leverage to avoid a scenario where unforeseen adverse business conditions will risk our ability to operate the business or repay debt. We seek to de-risk acquisitions by reduction in leverage and/or additional cash injections at the time of acquisition.
Do you sell companies off as you acquire new ones?
We make lifetime investments. Our intent is to grow our portfolio strategically with long term decisions and true value creation, reinvesting the cash flow from successful businesses to compound returns.
Do you take outside investors?
We’re picky. BPH plans to make a majority equity investment on future acquisitions. BPH will seek out investors that add strategic value to an acquisition with general industry experience or specific knowledge of new growth projects. BPH requires that all investors understand the underlying risks associated with small to mid-size business acquisitions and, in a worst-case scenario, the loss of principal should never alter an investor’s daily lifestyle.
Will BPH consider minority shares?
While we have taken minority positions in the past including venture funding, we are exclusively looking for majority/control positions in our future acquisitions.
Does BPH play a management role in the company after the sale is complete?
We will typically play a direct management role in the company, lending our expertise to improve operations and take the business to the next level. We also know the value of the company lies not just with its products and services, but with the people who deliver these products and services – their knowledge, skills and experience are critical to stability and future growth. Any management role first and foremost is designed to create a culture of ownership, where everyone at the firm approaches their role with pride.
Is it necessary to like Primanti Brother’s sandwiches to work with BPH?
Yes, there may be a test.