TDP believes strongly that material value can be created by partnering with lower middle market companies and management teams to help them realize their full growth potential. We focus on pursuing investments in small companies in which a clear set of executable initiatives can be structured with management that when followed will result in the development of a larger and stronger company that can be profitably sold for a much larger value. In particular, TDP actively assists portfolio companies in executing on the below set of initiatives to generate substantial value creation:
Complete add-on acquisitions
TDP takes an active role in working with management to source and complete synergistic add-on acquisitions. TDP focuses on executing add-on acquisitions that result in product differentiation, customer diversification, geographic expansion, overall financial stability, and accelerated growth opportunities for our underlying portfolio companies. We are highly involved in this process, including integrating acquisitions, allowing management teams to maintain their focus and time on the day-to-day operations of their businesses.
Implement best practices
TDP works with its portfolio companies to continually improve them. With decades of experience running businesses, our team relates to management of companies and works closely with them to develop long- term strategic plans that improve a company's value proposition, competitive position, organic growth outlook, and overall profitability. We also implement other best practices such as creating and optimizing underlying financial reporting and technology systems. In addition, TDP works with portfolio companies to develop their human capital, continually seeking to add strong members to the team to aid in accomplishing collective goals. By implementing proven best practices and utilizing our team's operating experience, TDP helps build stronger and more valuable portfolio companies that are better able to serve their customers and continue to grow in ever changing business environments.
Utilize conservative leverage
TDP's professionals have extensive experience securing leverage from third parties to support acquisition and growth initiatives. TDP works creatively with leverage providers to secure modest leverage for our portfolio companies to enhance investment returns.
Implement incentive compensation structures
TDP believes strongly in aligning financial incentives with our partners and rewarding strong performance. In each of our investments, TDP works with the company to develop ongoing comprehensive equity incentive plans for all key managers and stakeholders to properly align the interests of management and our investors.
Optimize company sale process
When exiting an investment, TDP strives to sell a larger and more attractive portfolio company through a well prepared auction sale process. We help companies prepare selling materials to best explain their long-term plans and expected financial performance to prospective purchasers. TDP also helps companies identify an appropriate time to exit based on industry trends, merger activity, and availability of likely buyers in the market.