Seeking Alignment

We love to learn about investment opportunities but hate to waste peoples’ time. We have answered some common questions below to help you determine our potential suitability as an investment partner.

What makes Stonehouse a good buyer?

— When Stonehouse makes an offer, we intend to complete promptly and as offered.

Our evidence:

• Stonehouse has completed 100% of acquisitions where we signed a Terms sheet (see investment process page);

• we have never changed the price or terms of a Terms sheet, and;

• we have averaged less than 3 months from Terms sheet to completion.

Stonehouse endeavours to treat business owners the way we would want to be treated if we were in their shoes.

Is Stonehouse a Private Equity Fund?

— No. Stonehouse is not a ‘Reseller’ of our businesses.

Stonehouse is modelled on the Berkshire Hathaway system of permanent business ownership.

Berkshire’s Vice Chairman, Charlie Munger, spoke about his involvement with Stonehouse in this article.

Does Stonehouse focus on any particular industries?

— No. We are truly industry agnostic and welcome the opportunity to engage with any outstanding Australasian business that fits our investment criteria.

Will Stonehouse invest in outstanding Australasian businesses offering an equity stake of less than 51%?

— No. A 51%+ equity stake is a requirement.

Will Stonehouse invest in businesses with forecast earnings (EBIT) of $5m?

— No. We require a history of earnings above $5m (EBIT) and look for sustainable long-term performance.

Will Stonehouse consider investing in distressed businesses who fit the investment criteria and have previously exceeded historical earnings (EBIT) of $5m?

— Yes. Our experienced and supportive team, and strong capital base, can work with management to get businesses back on track in these challenging situations.

What information does Stonehouse need to evaluate business investment opportunities?

— Relevant background information, an overview as to who your customers are and why, three years of historical statutory accounts, and a meeting or videoconference with owners and managers.

What are typical due diligence requirements?

— We like to keep things simple and move quickly when we identify a business that we want to partner with.

We undertake standard commercial accounting, legal, and tax reviews, and potentially other specific due diligence if appropriate for the business.

What are Stonehouse’s typical governance practices post-investment?

— All of our subsidiaries are independent, autonomously managed, private companies.

We have standard reporting requirements. We trust our subsidiary management teams to be transparent with us at all times, ask for support when needed, and continue to drive the ongoing success of the business.

Does Stonehouse offer advisory services?

— No, our sole focus is the acquisition and ownership of businesses. Providing advisory services would lead to significant conflicts of interest.

Does Stonehouse have available capital to support its subsidiaries post-investment?

— Yes. We encourage our subsidiaries to make long-term investments in organic and inorganic growth. We also understand that big outcomes don’t happen overnight.