PRESS RELEASE

Annapolis, Maryland -- Strategic Management Partners is pleased to announce that it has completed the final planning stage to raise an equity capital investment fund. The Strategic Equity Capital Investment Fund will invest between approximately $50 million in underperforming and undervalued companies, primarily in North America, over its seven year life. The fund structure is designed similar to the popular venture capital model, and will operate as an industrial holding company, to invest in select companies, serve as board members and advisors to management, provide strategic focus and market positioning expertise, and sell or take public companies in the future.

John M. Collard, Chairman, Strategic Management Partners, Past Chairman of the Turnaround Management Association, and a Certified Turnaround Professional (CTP) said, "this fund is unique in that it brings capital required, along with successful techniques of turnaround management, and professional managers to undervalued and missmanaged situations. These managers can make a difference, save jobs, and provide healthy returns to the investors."

Strategic Management Partners recently was key to capturing the $80 million Slovene Special Restructuring Programme, designed to manage a Restructuring Investment and Asset Management Fund. The program is funded by the Slovene Government, banks in Slovenia with troubled portfolios, and European Bank for Reconstruction and Development.

Collard said, "the concept of valuation, which affects both the initial purchase and resalability of the company will be our key focus. Most owners place too much importance on their time involved and sweat equity with the company. They value their company on emotion and the promise of future cash flows which they are without the ability to deliver. What most miss completely, however is the concept of 'operating assets value', the ability of the company to produce profits and cash flow. There is little application of the concept of producing value for what investors or buyers are willing to pay for."

Several key strengths and abilities have attracted investors to seriously look at the terms and conditions for investing. This team of professionals are leading experts in the fields of 1) hands-on turnaround management and are Certified Turnaround Professionals (CTP); 2) management of troubled investments that can eventually return multiples of 3x to 5x in distressed situations; 3) acquisition and divestiture experience totaling over 40 transactions, including 26 acquisitions, 4 start-ups via purchase and 10 divestitures worth over $730M in Sales Revenue or Leased Asset Valuation, and over $500M in transaction value at the time of transaction, and recovered over $80M for the owners of troubled assets; 4) knowledge to identify and recruit caliber turnaround CEOs into future investments; 5) unique experience with successful transition and conversion of contractors who have been providing services and products to the US government and want to convert into commercial and international markets.

The investment objective is to achieve a total return substantially higher than investments in listed securities. The strategy in many cases will be to structure investments to permit recouping the Fund's investment within the first several years and, thereafter, to retain interest in a continuing cash flow stream that meets the Fund's venture capital return objectives, maximizes exit strategy options and enhances enterprise value.

Investments will be primarily in equity or equity-like instruments of private or privatizing [public that can be taken private] enterprises. The size of investment in a particular enterprise will range from $5 to $15M. When desirable the Fund will lead syndication of up to $50 million and seek co-investment or participation by strategic investing partners. Investments will be directly related to buyout, modernization or expansion of the enterprise. The fund will not purchase old debt.

The Fund will focus on existing companies with a continuing capital shortage, free market competition problems and inadequate senior managerial skills. Companies will have receptive management team [or replaceable leadership] and exhibit significant long-term revenue growth and profit margin and cash improvement potential. "We expect our management partners to play the primary role in developing their business, however, when appropriate, we will supplement their managerial skills with our broad experience and expertise in profit improvement, revitalization and transition to new market segments," said Collard.

Investments will be diversified by business sectors, size and senior investor involvement. Target sectors with attractive potential for growth and high returns are telecommunications, light industrial manufacturing, natural resource-related companies, distribution, financial services and consumer products and services. Opportunities outside these areas that offer extraordinary returns will be considered selectively.

The Fund shall require membership on the company's Board of Directors and usually operating control to protect its interests. The Fund will help to shape business strategy and advise on short and long-term financial management. The principals have substantial hands-on, senior management experience in strategic planning, marketing, sales, distribution channels, organization building, cost management and financial restructuring. If appropriate, it will organize temporary participation of industry experts, secure long-term alliances with partners and train existing management teams.

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Date of this release November 18, 1996


We welcome inquires from the press. More information is available if required.

Strategic Management Partners

Contact JC @ 410-263-9100

  Acquisition Criteria

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Shortage of Capital -- We invest and take a controlling interest in the company. The fresh capital will not be used to pay down existing debt or for repair of past sins. New capital needs should be to fund market expansion, open distribution channels, provide market awareness, improve production capacity and capability, and improve working capital.

In Need of Focus and Strategy -- We look for companies that have lost their focus or are too diversified. We specialize in taking Federal Government contractors into Commercial and International markets. This conversion can be an opportunity based on new direction and management for the company. We rely on our strategic thinking and direction to make a difference in the investment return.

In Need of Marketing and Sales -- We look for companies that have been entrepreneurial oriented and lack the sales and distribution discipline. We rely on our strong ability to sell and distribute products and services into new markets to rejuvenate company growth and resulting returns.

In Need of Management Expertise -- We look for companies who may need new management discipline to put the plan and operation on the right track. Our strong management capabilities allow us to achieve unique returns on our investments, and some interesting success stories.

In Need of Permanent Management Team -- We look for companies who need a permanent management team in place to create stakeholder value. We build strong management teams within the company who can run the operation at expected cash and profit levels, with minimum supervision from outside sources. This is what we believe creates going concern value.

Underperforming Assets -- We look for companies that are not performing at their potential. Companies that can be turned in new directions, which will then drive profits and cash flow returns of high expectations. We want our strategic, management, and marketing skills to be the base on which high ROI is based.

Fair Valuation -- We look for companies that are realistically valued by their owners. When they are not performing at their potential, their value should reflect this. Companies and management teams that can drive profits and cash flow will produce the high return expectations that we demand. We want our strategic, management, and marketing skills to be the catalyst on which future value creation is based.

Contact us to discuss how your company fits within these investment criteria, and to explore acquisition possibilities. If you have an opportunity that qualifies, submit the business plan, recent financial history, and your expectations for confidential consideration. Please, only serious sellers. Principals only.

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  Contact Information

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John M. Collard, Chairman, CTP
Strategic Management Partners, Inc.
522 Horn Point Drive
Annapolis, Maryland [MD] 21403
Voice 410-263-9100 Facsimile 410-263-6094 E-Mail Strategist@aol.com

We serve as experts for comment or quote, please contact us at 410-263-9100

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