Brazos Partner: The CoMark LBO Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Brazos Partner: The CoMark LBO Case Solution

1. What is the Brazos investment strategy? Does it seem well suited for its position as a first time fund?

The investment strategy of Brazos is mainly focused on the lower end of the middle market for opportunities to buy out of the mid sized company. Moreover, the mid sized company should also show strong cash flow position, have strong niche markets for its products, and have good managerial personnel throughout the nation working efficiently in order to gain the opportunities prevailing in the market. In addition to this,the mid sized company should be located in the Southeast or Southwest regions, which would help the company in expanding its business across many parts of the world.

The prime investment strategy of Brazos in these midsized companies is that they focus on such companies with their values in between the $25 million and $250 million. By looking at all the above strategies of Brazo, it can be seen that because of its focus on the Texas as well as Southwest regions, it better suits its position as a first time fund issuer because of the fact that these regions are underserved by the LBO firms. Moreover, the company with the help of the requirements of thee dependable cash flows as well efficient managerial personnel made it flexible in order to acquire debt financing and increasing leverage of the company.

The company with the help of these strategies can easily manage its position as a first time fund. Despite investing for the mid sized company, a first round of funding may not be enough for the company to go for diversification which is the key issue for the first time fund.The company should also emphasize on the demonstrable cash flows which could help the company to acquire the debt financing for the company. Moreover, the company’s historical relationships and experience in the market helped in mitigating the first fund bias which hold back the entry of many prospective venture capital firms into the industry.

2. What is Brazos investment thesis for making an investment in CoMark?

In order to make the deal of investing in the CoMark more attractive and in order to gain huge amount of return for the shareholders of the company, it needs to produce its own perspective as well as investment thesis to rewrite the books of the bank in order to better value the CoMark value proposition and its future sustainability of the cash flows which could help in turn allow the company to get the outside financing.

The task could be accomplished by growing the capital of the proposed midsized company. Moreover, Brazo should focus on enhancing its sales force by investing heavily on the administration and the marketing expenses. In addition, the company should also focus on increasing its production capacity asthis will help the founders of the company to focus on more development strategies for the company for its future growth.

The last factor which could help in making this investment attractive is the targeted return which the company could expect from making this deal. Brazo estimated that the annual return for the company should be over 50% which could prove to be a viable asset for the company in the future...............

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