SEARCH FUND INDUSTRY SELECTION 
Writing Assignment: Sorting and selecting target industries and companies
1. A prioritized list of our top 5 industry criteria and top 5 company criteria
After an engaging group discussion, we arrived to the following list of our top 5 criteria for both choosing an industry and a company. We also weighted the criteria (total 100 points) against the importance in the final decision and used it in choosing our target industry later.
Industry
- High number of targeted companies: (20) As explained in the case, searching for a company to acquire can be a “number game.” Even if the industry is attractive, we cannot complete the deal without ample numbers of targeted company. Thus, we can mitigate risk of not finding a suitable company to acquire.
- Growing: (30) By choosing industries, which are growing, we can increase the possibility to have an attractive return.
- Sizable in terms of revenue: (15) If industries are sizable, there will be more chance to have companies that will fit to our financial criteria. What’s more, even if a niche market within the industry itself will still be big enough to be attractive.
- Straightforward operation: (10) As a search found, it is clear that the easier the industry operation, the easier to scale the learning curve quickly and to find out essential point of the business for growth and profit improvement.
- Personal interest and familiarity: (25) If we have personal interest and familiarity for the industry, we can learn the business quickly and make the great start immediately after becoming CEO.
Company
- Healthy financial performance (EBITA, evaluation, revenue, profit): (20) Robust margin for error and sufficient profits for the CEO to invest in growth or recruit experienced manager will increase the probability to operate successful businesses.
- Solid middle management: (25) As we are inexperienced CEO, we feel more pressure if there are no reliable management team. Also, to hire layer of middle management
1. A prioritized list of our top 5 industry criteria and top 5 company criteria
After an engaging group discussion, we arrived to the following list of our top 5 criteria for both choosing an industry and a company. We also weighted the criteria (total 100 points) against the importance in the final decision and used it in choosing our target industry later.
Industry
- High number of targeted companies: (20) As explained in the case, searching for a company to acquire can be a “number game.” Even if the industry is attractive, we cannot complete the deal without ample numbers of targeted company. Thus, we can mitigate risk of not finding a suitable company to acquire.
- Growing: (30) By choosing industries, which are growing, we can increase the possibility to have an attractive return.
- Sizable in terms of revenue: (15) If industries are sizable, there will be more chance to have companies that will fit to our financial criteria. What’s more, even if a niche market within the industry itself will still be big enough to be attractive.
- Straightforward operation: (10) As a search found, it is clear that the easier the industry operation, the easier to scale the learning curve quickly and to find out essential point of the business for growth and profit improvement.
- Personal interest and familiarity: (25) If we have personal interest and familiarity for the industry, we can learn the business quickly and make the great start immediately after becoming CEO.
Company
- Healthy financial performance (EBITA, evaluation, revenue, profit): (20) Robust margin for error and sufficient profits for the CEO to invest in growth or recruit experienced manager will increase the probability to operate successful businesses.
- Solid middle management: (25) As we are inexperienced CEO, we feel more pressure if there are no reliable management team. Also, to hire layer of middle management