Investment Strategy

Spire Capital's investment focus on the smaller end of the business services, information services, media and communications industries allows Spire to concentrate solely on those industries where there is domain expertise and where numerous investment opportunities can be sourced outside the more competitive auction environment typically found in larger transactions.

Spire Capital provides buyout capital to platform companies with ample cash flow and scale, eliminating certain risk factors associated with an earlier-stage focus. Complementary add-on acquisitions to an established platform company are often an integral component of Spire Capital's investment strategy, helping to leverage capital, operations and management.

A hallmark of Spire Capital's investment strategy is the establishment of a diversified portfolio consisting of companies across various industry sub-sectors. The core concepts of its investment strategy are set forth below.

• Industry Focus - The business services, information services, media and communications industries have long been among the fastest growing business segments in the United States, and are expected to continue outperforming the general economy in the years ahead. The growth characteristics, structural changes, shifting regulatory environment, and increasing demand for new and innovative products and services in this industry group create a multitude of investment opportunities. The evolution of traditional media businesses, the establishment of new media and communications services, and the proliferation of business and information services outsourcing should continue to accelerate industry growth and therefore, yield more investment opportunities.
• Active Portfolio Company Involvement - Spire Capital's Principals' direct participation in the targeted industry segments has proven to be extremely valuable during the due diligence process. Strong knowledge of the underlying business models, accompanied by the ability to effectively access industry "experts," positions the Principals to efficiently evaluate potential investment opportunities and prospective management teams. As the backing of experienced management is a critical component of our investment strategy, the ability to obtain first-hand assessment of their capabilities through industry colleagues proves invaluable.
  
  Spire's collective experience and deep industry networks provide portfolio companies with both assistance in strategic guidance and a network of relationships to help achieve business objectives and create value; a key component that distinguishes Spire Capital from other private equity firms. As members of a portfolio company's Board of Directors, the Principals play an active role in assisting management in raising capital, formulating strategy, establishing operating objectives, augmenting management teams and addressing other organizational issues.
• Proprietary Transactions - Spire Capital's extensive relationships with senior executives within the targeted industries, as well as the firm's small market focus, results in access to transactions and investment opportunities not commonly available to other investors and provides Spire with a distinct advantage in a competitive transaction environment. A strong knowledge of underlying business models, combined with access to limited partners, industry executives and/or advisors, positions Spire Capital to perform due diligence efficiently while evaluating potential investment opportunities and prospective management teams.
• Partnerships with Management - Spire Capital's extensive industry relationships provide a significant competitive advantage in sourcing superior management teams and providing due diligence on such prospective management teams. Increasingly, Spire Capital partners with management through a "sponsored executive search" program whereby the prospecting for potential investments and the due diligence process are done in concert with management to further reduce investment risk and more clearly identify future opportunities.
• Focus on Small Market Buyout Opportunities - Spire Capital focuses on companies typically under $150 million in Enterprise Value with significant operating leverage, recurring revenue streams and superior growth potential. Spire creates value by (i) expanding distribution channels, (ii) broadening geographic territory, (iii) increasing the number of, and demand for, products or services and (iv) pursuing strategic acquisitions. Spire Capital invests across a broad range of business services, information services, media and communications companies by acquiring a majority interest in such companies as well as financing portfolio company acquisition strategies with proven management teams.
• Barriers to Entry - The Principals prefer investments that exhibit a defensible niche position and/or a distinct competitive advantage resulting in sustainable barriers to entry. Barriers to entry, whether technological, regulatory or other, tend to limit competition, often resulting in greater pricing power and, therefore, more predictable cash flows.