Strategy & business model
Our Strategy
Rosebank’s objective is to recreate the same successful ‘Buy, Improve, Sell’ business model which the Rosebank Co-Founders successfully implemented during their time at Melrose. Rosebank proposes to acquire quality industrial or manufacturing businesses whose performance can be enhanced through operational improvement, before being sold and proceeds returned to shareholders, creating significant value over a 3-5 year period.
Rosebank intends to create value in those acquired businesses primarily through:
- Eliminating unnecessary corporate overhead
- Changing the focus of management teams and incentivising those management teams well
- Driving sustainable improvement
- Focusing on profitability and cash generation
- Reinvesting heavily into acquired businesses, to drive long-term performance.
Consistent with their track record at Melrose, the Rosebank Co-Founders will aim to double shareholders’ investment in a given acquisition during a three- to five-year investment horizon.
It is the intention of the Directors that, shortly after completing its first major acquisition, Rosebank will seek admission of the Ordinary Shares to the Official List and to trading on the Main Market of the London Stock Exchange.
Business model
Possible acquisition opportunities will be identified through the Rosebank Co-Founders’ own research and from external sources. The Rosebank Co-Founders have unique experience in sourcing potential acquisition targets, and an extensive deal sourcing network, having executed public and private deals in the UK, Europe and the US during their time at Melrose.
A clear focus on investments
While the Directors intend to focus upon investments in companies headquartered in the UK, North America and Europe operating in the industrials or manufacturing sectors with an indicative enterprise value of up to approximately $3 billion, there will be no limit as to the number of investments. The Directors intend to pursue more than one acquisition, though propose to ensure improvements are delivered in any existing assets before pursuing subsequent acquisition opportunities.
It is intended that acquisitions will be funded initially using a combination of the issue of further equity on a pre-emptive basis and prudent bank financing.
In the event of a significant increase in the Company’s share price prior to or in connection with an initial acquisition, when ascribing a value to Ordinary Shares being issued to fund such acquisition it may be necessary to have regard not only to the market value of the Ordinary Shares at that time but also to the underlying assets of the Company and it is possible that new Ordinary Shares may be issued at a price significantly lower than the market price of the Company’s Ordinary Shares at that time.
Whilst debt finance is intended to be used as part of the group’s capital base, Rosebank intends to use debt finance in a prudent manner which does not unduly restrict the flexibility of the group.
Prior shareholder approval will be sought for any acquisition which constitutes a reverse takeover under the AIM Rules.