Acquisition Criteria

Our Business Strategy

We are focused on businesses in the financial services, with particular emphasis on businesses that offer a differentiated technology platform, customer acquisition models and/or products for interfacing with the financial services sector, traditional asset managers, wealth and alternative asset managers with unique business strategies, and specialty finance companies which generally exhibit higher margins, higher growth rates, and less regulatory burdens versus traditional banks. Over the past several years, there has been a rise in the level of sophistication and interconnectivity between innovative technology and financial services providers, and we expect this trend to continue and accelerate. We believe that there are many potential targets within the financial services space that could become attractive public companies. These potential targets exhibit a broad range of business models and financial characteristics that range from very high growth innovative companies to more mature businesses with established franchises, recurring revenues and strong cash flows.

We are not limited to any single segment but will instead target a wide variety of companies that deliver a solution or product to the financial services end-market. We believe that our extensive experience and demonstrated success investing in businesses in this industry provide us with a unique set of capabilities that will be utilized in generating shareholder returns. We will seek to acquire established businesses that we believe are fundamentally sound but that could potentially benefit from financial, operational, strategic or managerial improvements to maximize value. We may also look at earlier stage companies that exhibit the potential to change the industries in which they participate, and which may offer the potential of sustained high levels of revenue growth.

Consistent with our industry focus, we target financial services businesses that have strong management teams, demonstrated organic growth, and differentiated products or services. Opportunities range from high-growth, customer facing technologies in payments, lending and digital finance to more mature, high-margin, stable businesses, which may be engaged in lending, asset management, or providing critical processing and support to established financial services firms. We believe that the wide networks of our management team, EJF and our board will deliver access to a broad range of opportunities across the financial services landscape.

Our Acquisition Criteria

Consistent with our investment themes and business strategy, we seek to identify companies that have compelling growth potential and will benefit from being publicly traded and having access to the public capital markets. We have identified the following general criteria and guidelines, which we believe are essential in evaluating prospective target businesses. We will use these guidelines to evaluate acquisition opportunities, but we may decide to enter into our initial business combination with target companies or assets that do not meet some or all of these criteria and guidelines. We will seek to acquire companies that have the following characteristics:

  • Durable business model – We will seek fundamentally sound businesses that have a durable business model with the ability to successfully navigate an economic downturn, and changes in the industry landscape, social sustainability trends and evolving regulatory environment and are not deeply distressed;
  • Management and governance – We will seek companies that can benefit from the vast network, experience, reputation and guidance of our management team, advisors and board of directors as well as affiliation and endorsement of EJF;
  • Competitive industry positioning – We will seek companies that have a defensible market position and demonstrate differentiated competitive advantages with high barriers to entry against new competitors;
  • Stable cash flow – We will seek companies that have recurring, predictable revenues and the history of, or the near-term potential to, generate stable and sustainable free cash flow;
  • Growth potential – We will seek companies that exhibit unrecognized value, desirable returns on capital, and a need for capital to achieve the company’s growth strategy;
  • Potential to scale – We will seek companies that have the potential for strong and continued growth both organically and through add-on acquisitions;
  • Inflection point - We will seek companies that are at an inflection point and would benefit from a catalyst such as incremental capital, innovation through new operational practices and application of innovative financial services technologies, product creation or additional management expertise;
  • Attractive valuation – We will seek companies that have publicly traded comparable companies which operate in a similar industry sector or which have similar operating metrics which may help establish that the valuation of our initial business combination is attractive relative to such public peers; and
  • Ready to be a public company – We will seek companies that are positioned to be a publicly traded company and can benefit from being a publicly traded company, with access to broader and more efficient capital markets, to drive improved financial performance and achieve the company’s business strategy.

These attributes are not intended to be exhaustive. We are willing to accept a high degree of situational, legal and/or capital structure complexity in a business combination if we believe that the potential opportunity justifies this additional complexity, particularly if these issues can be resolved in connection with and as a result of a combination with us. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.