Homeland Security Capital Corp Logo
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

A Strategy for Value Creation

Homeland Security Capital Corp. has specific and focused expertise in identifying strategic opportunities on the basis of major industry trends, strategic synergy with existing companies, and the opportunity to apply targeted resources at critical business junctures to drive transformational growth. In evaluating market attractiveness and entrepreneur criteria for each business segment, we begin by identifying opportunities to create long-term value.

The primary objective of Homeland Security Capital Corp. is to build companies with substantial strategic value. HSCC management and partners work to ensure that a partner business evolves to improve its competitive position and attractiveness of partner companies. This can involve growth opportunities to transform the company into a more attractive acquisition or IPO candidate. Professionally managed and controlled companies are inherently more effective and ultimately more valuable to investors or strategic buyers. We can develop well-run organizations generally not found in smaller companies. This includes building integrated, streamlined and standardized operations with state-of-the-art financial controls and systems.

Operating Strategy

Capitalize on Cross-Selling Opportunities
We intend to leverage our current client relationships by cross-selling the full range of services offered by our platform companies. We believe cross-selling opportunities will increase as we acquire businesses in other sectors of the homeland security industry.

Achieve Operating Efficiencies
We intend to achieve operating efficiencies within our platform companies. For example, as new businesses are acquired, our existing technology infrastructure will support additional customers. At the corporate level, we will combine administrative functions such as financial reporting, insurance, employee benefits and legal support and realize volume purchasing advantages with respect to travel and other purchases.

Leverage Platform Company Autonomy
We plan to conduct our operations on a decentralized basis whereby management of each platform company will be responsible for its day-to-day operations, sales relationships and the identification of additional acquisition candidates in their respective sectors. Our senior management will provide the platform companies with strategic oversight and guidance with respect to acquisitions, financing, marketing, operations and cross-selling opportunities. We believe that a decentralized management approach will result in better customer service by allowing management of each platform company the flexibility to implement policies and make decisions based on the needs of its customers. This is in contrast to the traditional consolidation approach used by other consolidators in which the owners/operators and their employees are often relieved of management responsibility as a result of complete centralization of management in the consolidated enterprises.

Implement Technology
We will use the most effective technology to enhance our efficiency and ability to monitor our portfolio companies. We strive to increase the operating margins of acquired companies by implementing operating and technology systems that improve and enhance the operations of the acquired companies. We believe that many of our acquired companies have not made material investments in such operating and technology systems because, as independent entities, they lack the necessary scale to justify the investment. We believe the implementation of such systems may significantly increase the efficiency of our acquired companies.

Acquisition Strategy

Identify and Pursue Strategic Consolidation Opportunities
We intend to capitalize on consolidation opportunities by acquiring companies in growing sectors that will benefit from economies of scale and that have some or all of the following characteristics:

  • Revenues and preferably profits with established customers
  • Long-term growth prospects
  • Experienced management team willing to continue managing the enterprise
  • Significant acquisition consideration that is performance-based
  • Operating in a highly fragmented sector of the homeland security industry characterized by significant numbers of smaller acquisition targets with few market leaders in the sector.
Target companies are often headed by owners/operators who desire liquidity and may be unable to access the capital markets effectively or to access the government markets that are characterized by complex and bureaucratic processes, protracted sales cycles and diffused procurement between federal, state and local levels.

Acquire Complementary Businesses
We intend to acquire businesses that offer marketing services in which each of the company's platform companies operates. Adding geographic breadth and increasing our presence within geographic regions allows us to serve our clients more efficiently and cost effectively. As our industries continue to consolidate, national coverage and technology capabilities will become increasingly important.

Acquire Strategic New Businesses
There are numerous other attractive fragmented sectors within the homeland security industry, such as products and services for the intelligence industry, medical and public health disaster management, surveillance and monitoring or remote sensing. By entering any one or more of these sectors, we intend to realize additional operating and revenue synergies across its platform companies, and may leverage existing relationships that will create cross-selling opportunities.

Enchancing the Bottom Line

The active support of partner company management and application of advanced controls is aimed at building revenue and cutting costs.

Increased Revenues
Homeland Security Capital Corp. and its management are continuously seeking ways to accelerate organic growth. This can be derived from a number of actions:

  • Improving sales and marketing capabilities
  • Opening the right doors to create sales opportunities
  • Providing market intelligence that will help identify the most promising opportunities

Reduced Costs
Equal emphasis is placed on finding ways to operate more cost-effectively. Typical cost-saving opportunities arise from:
  • Increased purchasing power
  • Scale economies in back-office functions
  • Improved use of labor and assets
  • Best practice implementation across similar operations
  • Better information from integrated MIS systems
Collectively, these improvements are aimed at creating robust and healthy enterprises that have the potential to lead their industries in growth and profitability.

Recruiting Top Flight Management
Great managers build great companies. We devote substantial resources to identifying, recruiting and partnering with exceptional executives. By partnering with superior management teams, we expect to achieve more favorable investment returns while mitigating risks inherent in the investment process.

The leaders we seek are expected to have some or all of the following characteristics:
  • A sense of vision and a history of strategic oversight, operations management and successful profit and loss responsibility
  • A positive industry reputation with a record of creating substantial value
  • Established relationships and credibility that create proprietary deal opportunities
  • The ability to identify, negotiate and integrate acquisitions enabling the creation of value through acquisitions
  • A focus on key operational metrics and understanding of key aspects that allow a company to create value
  • The ability to recruit from a network built over the course of their career
  • The skills to manage top level executives to create a dynamic result
  • Financial sophistication and financial results orientation - focus on profitability
  • A long-term orientation while retaining the flexibility to be opportunistic