Safeguard Scientifics’ Aggregate Partner Company Revenue and Employment Up; Economy Down
Posted by | March 30, 2010
Since coming to Safeguard Scientifics nearly five years ago, our management team created a game plan to transition our partner companies from a group of lower growth, lower valuation metric services businesses with high capital requirements to a group of higher growth, higher valuation metric businesses with lower capital needs. We targeted growth segments of the economy — life sciences and technology — that have a history of behaving counter cyclical to one another.
Our recent results are encouraging. While other firms have struggled to keep revenue neutral in this crisis-ridden economy, Safeguard’s partner companies have grown their aggregate revenue from $100 million in 2007 to $262 million in 2009. Partner companies have forecasted aggregate revenue growth in 2010 to a range between $300 million to $325 million.
In addition, despite a tough economic backdrop, our partner companies have added nearly 500 jobs to their ranks, accounting for an increase of approximately 55% in employment, from 900 to 1,400 people during that same two year period.
We attribute these results to our growth-oriented strategy.
We’ve identified 5 strategic themes, equally present in each segment, to drive growth. We refer to these themes as M2C3 — Maturity, Migration, Convergence, Compliance and Cost Containment.
These are large themes shaping our world, and there are many companies working on exciting products that incorporate one or all of these themes. But, there are other characteristics that have enabled our partner companies to achieve this growth. They include:
- CAPITAL — These businesses were afforded growth-equity capital, supplemented by some debt financing, provided by Safeguard and, in some cases, our syndication partners.
- TALENTED PEOPLE — The growth-equity capital was used to build value in our partner companies by talented, passionate leaders who can identify and attract experienced professionals with demonstrable accomplishments in their respective markets.
- VALUE PROPOSITION — The leadership of our partner companies have a passionate, clear, and compelling vision to deliver a unique value proposition that addresses a large, growing, and frequently underserved need of a specific, sizeable customer set.
- FOCUS — Success requires a clear and compelling vision, delivered to a specific marketplace by talented people who are tightly focused on achieving a specific game plan – a specific set of objectives, properly financed by an experienced, value-adding business partner, such as Safeguard.
By focusing on these broad themes and supporting our partner companies with these winning characteristics, we have been able to drive Safeguard’s growth. Our partner companies continue to execute against their game plans and deliver results.
