Overview

We look for dedicated entrepreneurs who are experts in their industry - with a laser focus. We help our clients identify viable, alternative sources of funding and focus on sectors with the potential to generate rapid growth. Typically, this includes industries in which there are high rates of change, often driven by the emergence of new and disruptive technologies, regulatory change or emerging trends.

But navigating these disruptive currents takes knowledgeable, networked partners with a clear understanding of the industry's dynamics. In key sectors, we have an exceptional depth of experience.

Information Technology

The rise of open source technologies, the ubiquity of Microsoft technologies and the drive towards web services-based application infrastructures, are all forcing suppliers to re-evaluate their technology platforms and business models, creating opportunity for start-ups. At Blackwater, we embrace focused businesses that can play to those trends, and which demonstrate the potential to become a leader in a defined niche. These areas include IT mobility, on-demand computing, integrated biometrics and nanotechnology - technologies that are expanding IT requirements outside of established domains.

The software sector continues to expand as companies seek business advantage and increased efficiency through the use of new and improved software. At the same time, the IT services sector is undergoing a period of transition and, with relatively modest growth rates forecast for the next few years, the key focus is on consolidation. The large enterprise resource planning (ERP) companies, having secured the large business sector, are now seeking to control the small to medium-sized business sector. This, together with the requirement to financially justify all IT purchases with short payback timescales, is bringing a new level of competitiveness to the market.

The disintegration of the established value chain in the semiconductor market combined with the trend towards more complete system-on-chip solutions is creating significant opportunities for start-ups and entrepreneurs. Spiralling design and manufacture costs, coupled with decreasing profit margins, are also forcing older, established players to look to new companies to provide innovation in the areas of technology, materials and manufacturing techniques. At Blackwater, we look for companies that have a varied combination of these values: strong software or hardware partners, quality management teams, strong distribution channels, viable patents on their technology and sustainable customer traction. Sectors include:

• Electronic Devices
• Software
• Hosted-services
• Computer hardware
• Communications and Networking
• eCommerce
• Semiconductor
• Information Services
• Data Storage
• Internet Security
• On-line Gaming
• Nanotechnology

Industry Focus

Telecommunications

The communications sector continues to show strong growth potential; expanding rapidly as both consumers and enterprises embrace the concept of always-on communications, delivered via an ever-expanding range of mobile and wireless technologies.

The sheer scale of the telecommunications market, and the constant drive from operators and handset manufacturers to grow their user base, means there are significant opportunities for companies that can reduce customer churn and increase average revenue per unit through improved customer satisfaction and greater operational efficiency.

In the data communications market, network management and optimization are becoming ever more important as multimedia content competes with traditional data on corporate LANs and WANs. The integration and management of the intersections between wireless and fixed infrastructures also remains a constant area of development. Increased awareness of IT security issues continues to fuel growth in the security industry, and affordable high-bandwidth Internet access and a desire to cut business travel are accelerating growth for on-demand video and conferencing. Significantly, VoIP has matured into a stable, mainstream solution appropriate for businesses and consumers. Sectors include:

• VoIP
• Infrastructure Networks
• Wireless Communications
• Network Security
• Communication services and software
• Mobile devices
• Broadband
• Service Providers

Health Care

The healthcare sector has strong long-term drivers: the aging population demographic is leading to increased demand for healthcare products and services; growing patient awareness is leading to increased expectation of better treatment and services; and technological advances are leading to new types of treatment. Although the availability of government funding is a crucial factor for the healthcare sector, these long-term trends should remain in place. There is also an increasing need for private equity to deliver more capacity and quality of care into the system.

We partner with businesses that develop and market innovative products to address unmet medical needs and/or help reduce cost. We remain focused on assisting businesses that own or are developing IP-protected products, and primarily target later-stage opportunities with reduced technical risk and a clear route to revenues and profitability. To help entrepreneurs raise capital, we believe companies benefit from products in clinical trials, strategic partnerships, low-capital requirements; short development times while still targeting the unmet needs in high-growth markets.

Four clear business models of interest to Blackwater are: asset/facilities-based businesses, businesses based on distribution networks that can be leveraged; companies with innovative technology that are able to deliver treatments or services in a different and more effective way; and companies built around good, long-term contracts within the health system. In short, a wide range of opportunities, from drug discovery and medical technology to acute and long term care services will continue to drive the overall health care sector. Blackwater helps companies to maximize the potential of their market leading products and services by identifying viable alternative funding options. Sectors include:

• Biotechnology
• Medical Devices and Equipment
• Stem Cell
• Beauty and Personal Care
• Pharmaceuticals
• Healthcare IT
• Health Care Services
• Medical Information Systems

Consumer & Business Services

We stress the underlying fundamentals of purchasing, marketing, pricing, distribution and customer service as well understanding the latest technology. In today's modern marketplace, consumers continue to rapidly shift loyalties and allegiances between concepts. Our combined years of experience are brought to bear in the proper positioning of our clients needs. Be they cutting edge direct marketers, established hospitality or a fast growing new cuisine, we understand our client needs and bring optimum insight and execution to each individual transaction resulting in securing the growth capital required to graduate to the next-stage in a companies growth process.

The Consumer, Business Products and Services area includes companies that manufacture and sell products and/or provide services to individuals, businesses, and government bodies. Companies in this group are not developers of information or healthcare technologies but rather producers of products for the consumer markets which include security systems, cosmetics and personal care products, electronic games, transportation, education and training services. Sectors include:

• Hospitality
• Food and Beverage
• Sports and Leisure
• Direct Marketing
• Education and Training
• Household and Personal Products
• Professional and Consumer Services
• Electronic Commerce

Industrial & Manufacturing

Our investment banking professionals can assist many Industrial Products and Manufacturing companies in garnering the capital they need whether it be packaging materials, aerospace and aircraft equipment, demand-driven manufacturing, specialty components or any number of other industrial products. This group includes manufacturers of products and equipment for use by businesses in their operations. These companies are not developers of information or medical technologies, their products do not use information technology (such as software or electronics), and they do not fall under any other category.

Our Industrial and Manufacturing investment philosophy is to leverage our expertise to identify and sponsor companies with value-added opportunities, generally signified by strong management teams, attractive industry trends, top-line and operating margin growth opportunities and robust exit alternatives. Sectors include:

• Aerospace and Defense
• Transportation and Logistics
• Diversified Industry
• Supply Chain
• Manufacturing and Services
• Security and Safety Equipment
• Electrical Equipment
• Industrial Automation

Other Areas of Investment Banking Focus

Blackwater considers assignments in other sectors such as energy, environment and education, provided that there is a clear commercial opportunity combined with rapid growth potential.

We are less enthusiastic about capital-intensive models, and are unlikely to engage in businesses building their own significant infrastructure at the pre-revenue stage. Sectors that Blackwater will not engage in are music, television and movie production, real estate, magazine and publishing, traditional retail and financial services.