These companies, although performing well, typically are in need of operational or strategic assistance in one form or another. We are not interested in optimized businesses where profitability has expanded significantly over the past few years or where current ownership or management is primarily interested in cashing out.

Typically are in need of operational or strategic growthassistance in one

Recapitalizations – Often ownership of a well-run business at the lower end of the middle market have a substantial portion of their net worth tied up in the business. These owners often seek to gain liquidity and asset diversification for their personal portfolios while simultaneously retaining a significant equity stake in the companies they have built. In these situations, Platform Capital is typically able to structure a transaction where the selling shareholders/ management can retain a larger ownership percentage than that which other private equity firms are able to offer.

Generational Transitions – Family-owned businesses where the existing generation of ownership desires to sell a portion of its business for liquidity or estate reasons but would like to preserve family continuity in management and/or ownership of the business post-transaction.

Long Hold Business Owners – Transactions where the ownership either does not want to enter the private equity cycle whereby their business will have to be re-sold every 3-5 years or where the company, either by its nature or the nature of its industry, does not have a definable exit sale strategy. Under these circumstances, the Partners of Platform Capital behave as an extension of the business owner in that we are willing to hold our investments well over 10 years. Small business owners are successful for many reasons, one of them being their employee base. Sellers value the current and future well being of the employees and would prefer a more stable, long term work environment, which aligns with our long term investment philosophy.

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Whether the transaction is an out of court restructuring, debt acquisition, article 9 sale, private foreclosure, the sponsorship of a reorganization plan or simply an investment in an underperforming or highly distressed company, Platform Capital is committed to working with the business to restore profitability and create value for the debt and equity holders, employees, customers and other stakeholders of the business.

In addition to those criteria listed above, Platform Capital generally seeks the following characteristics in turnaround investments.

• Good Business/Bad Balance Sheet - A performing company that may be suffocating from an unhealthy balance sheet versus a company that has a unsustainable business model in addition to an unhealthy balance sheet.
• Demonstrable explanation for corporate underperformance - Examples include failed acquisitions, poor business decisions, industry cyclicality, over-leveraged balance sheets and/or excessive legacy costs.
• Through process improvements, cost cutting, balance sheet restructuring, sales and marketing strategy or signed backlog that increases revenue.
• Revenues in excess of $3M.
• Add-on investments to existing portfolio companies need not fit into one of the above categories. Rather, add-on investments need only be a compelling strategic fit with an existing portfolio company.

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Corporate or Intermediary Orphans – Smaller divisions of larger companies that have suffered from a lack of attention and resources. Additionally, companies represented by an intermediary that may not attract interest from a traditional buyer pool.

Companies with Customer Concentration – Companies where other potential acquirers may shy away from investing due to concentration with one customer or a single, non-desirous customer type. As long as we believe that a company is marketing a compelling product or maintains a specific market niche, we are interested investors.

Out-of-Favor Industries – Many investors avoid some industries due to timing in an economic cycle, headline risk or unfavorable industry dynamics. Again, as long as we believe that a company is marketing a compelling product or maintains a specific market niche, we are interested investors.

Companies with Unique Environmental, Union or Other Problems – Platform Capital is very experienced with investing in situations where a company is suffering from unfavorable union dynamics, environmental concerns or other unique issues. If we can quantify these problems and ascertain a methodology to mitigate the risk, we are open to investing in these situations.

Secured Lender Exit Plan – Platform Capital can act as an exit plan for a secured lender working with a company through a special assets situation. Platform Capital is more than just a debt trader. We acquire debt on assets we intend to own outright for the long term versus making a margin on flipping debt instruments.

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