We prefer to buy a company from (or invest with) the owners and management team who built the business. They want to keep driving the business forward, but have reached a point where their vision for the future demands resources, expertise or perhaps an investment time horizon beyond what they can provide on their own. They care about the future of the company, its employees, its customers, its suppliers and its communities. They are not just looking to sell it for the highest price they can get, irrespective of the collateral consequences; rather, they seek a long-term ownership context that will embrace and preserve the character and integrity of the organization they have labored to build.

Without exception, we buy only where the company’s leadership team and employees remain excited about, and committed to, participating in the company’s future. We want management to stay a part of the company after the sale. We will help work through any changes that occur in the normal course of the leadership team’s evolution, but we are not interested in situations where management must be replaced the day after we purchase a company.

On price, our view is straightforward:

1. We would not expect a seller to accept less than full value for a business they have built over many years—in some cases, through their, and perhaps their predecessors’, entire working lives; and
2. We will not pay a price so high that we cannot earn a fair return on our investment.

Before anything else, we consider whether the seller’s broad plans and hopes for the future of the company seem to be in line with our own. If our respective visions for the company’s future are similar, then there is a good chance that our estimates of the company’s current value will be similar. In those cases, we most certainly pay a fair price. The market would not let us do otherwise. Moreover, we are happy to do so. Our objective is not to buy a company for less than it is worth. We are looking to acquire something of value that we believe can become still more valuable through continued hard work and additional investment over time.