MDP has a disciplined approach to investing comprised of three principal elements:

Partner with exceptional managers
All investments made by MDP have as a central element the partnering of MDP with a strong management team. We seek experienced managers who have a solid understanding of their businesses and track records of building shareholder value. As evidence of our commitment to management, each MDP principal makes a significant personal investment in every transaction MDP undertakes. MDP has demonstrated over its more than two decades of investing experience that the combination of a talented and motivated management team with the capital and resources of MDP is a powerful formula for success.

Identify attractive businesses
We target businesses with strong competitive characteristics that provide motivated management teams the platform to create significant value in partnership with MDP. These competitive characteristics may include a leading market share, a track record of innovation, substantial free cash flow, a widely recognized brand name, a proprietary manufacturing process, a highly efficient and defensible distribution channel, a government-issued license, or a scalable business model that has strong returns on capital.

Structure investments appropriately
Our overriding goals when structuring an investment are twofold: first, to ensure that capital is readily available to our portfolio management teams for profitable investment in their respective businesses; and second, to ensure that leverage, if used, is applied prudently.

MDP considers the operating characteristics of a business in designing an appropriate capital structure. Management buyouts tend to be more mature businesses with stable cash flow characteristics. Structured/growth equity financings are often appropriate for companies with heavy prospective capital requirements to fund acquisitions or rapid internal growth. Irrespective of the type of capital structure arranged for an MDP investment, we expect returns on our investments to be derived primarily from growth and operating improvements in the businesses, and only secondarily from the use of financial leverage.