AudraFay's Blog

BLACKHAWK PARTNERS

Blackhawk Partners, Inc. is a private “family office” that has two major lines of business.

Private Equity Investments & Advisory Services

Our Private Equity Investments & Advisory Services Group focuses on originating, structuring and acting as equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations, buildups, and growth capital financings mainly in companies in the global energy, services and technology sectors.

Our Mission is to generate significant capital growth through “global “ early stage investments (no start-ups or pre-revenue transactions) in such companies.

We basically work with those type companies to attract complementary skills to insure commercial success, to develop high margin products to address large growing markets, to develop business plans with significant milestones, to build investor syndicates to fund to positive cash flow and create significant "wealth" for all involved.

Physical Commodities Trading

Our Physical Commodities Trading Group focuses on the physical trading of Gold bullion (GLD and non-GLD), Financial Instruments (Medium Term Notes, Bank Guarantees …) and all basic Oil derivative products (D2, Jet Fuel, REBCO, SLCO, M100).

Our Mission is to be a major participant in the global flow of natural resources by combining the knowledge gained through our own diversified portfolio of assets with the strength of our unique marketing capability.

Our role is to be a reliable and competitive partner to businesses in the segments of the market which we serve and to support these businesses as they expand and develop.

Regarding our Private Equity business:

Our investment approach as a “private family office” consists of filling in the funding gap between angel funding and major private equity groups by being the LEAD investor and supplying all the capital required through exit. We work with top operators to build great businesses, first last and foremost with respect for the individual paramount.

Our “sweet spot” in terms of “global” private or public equity investments mainly consists of deploying $5 million to $50 million in growth companies already cash flowing or 6-12 months away from positive cash flow.

Our focus is then engaging alongside the companies’ management teams we're backing in a well executed "roll-up" strategy while providing them with the financial, human capital and other resources needed to bring those companies to around $250 million in revenues and at least $25 million in EBITDA within 3-5 years and exiting within that time frame through the sale of such built up entities to another financial/strategic investor.

We have already closed on three new platforms as well as three add-on acquisitions over the last eighteen months. We have under letter of intent two new platform companies and two add-ons. In addition to the benefit of more aggressive capital than most “capital pools” out there, our successful activity results from an adherence to a set of defined criteria. When a company is in our comfort zone, we are closers.

Such criteria are as follows:

Investment Strategy:

We target business services companies with the following basic attributes:

1. Process intensive businesses and/or businesses with differentiating assets.
2. Fragmented competitive landscape with the potential for both organic growth and growth through consolidation.
3. Companies lending themselves to a partnership with Blackhawk Partners, with the seller retaining a continued involvement in the success of the business and the success of the Group.
4. Diverse client base with strong retention traits.
5. Positive cash flow, which can be improved with better operating efficiencies.

Investment Criteria:

We must be able to add value to the venture under consideration in addition to capital. Additional key attributes we look for in investing in businesses are:

1. Clear identification of the company’s potential customer’s pain.
2. A sustainable advantage in relieving that pain better than anyone else.
3. A validated business model that can demonstrate a reasonable chance of achieving $100+ million annual turnover within 3 years; whether through organic growth and/or acquisitions
4. The venture must be scalable and global.
5. Must generate significant revenue by delivering their products or services within 6-12 months of funding.
6. An absolute top-notch team that possesses the skills, passion and connectivity in their industry to execute the business plan and meet the priorities of all their stakeholders and most importantly, we have to like them.

Industries:

We are industry agnostic, investing in technology, media & entertainment, communications, consumer products, business Services, etc….Investing in the U.S, Canada, Europe & the Middle East including Turkey.

Our reference list includes former and current CEOs, co-investors, lenders, service professionals, and investment bankers. These individuals are not forewarned about prospective calls and are prepared to tell you about the value of our word in the courtship and the value of our partnership post-closing.

Regarding our Physical Commodities Trading business:

• We only deal with groups who have a track record of having closed on oil, currencies, financial instruments and AU OR GOLD related trades before. A background of your track record will be asked from you to conduct business going forward.
• We require the sharing of due diligence undertaken on behalf of your client prior to engaging in any transaction; saves everybody both time and aggravation.
• Our business is a people’s business not a procedures business. Transparency is key in conducting business with you.
• We will literally not undertake any trade directly associated with any entity out of Iran, Venezuela, North Korea, Cuba, Nigeria and Syria.

Our Basic Rules of Engagement

For Oil related transactions

When representing buyers:

• We want immediate proof of product before going to the banks and after signature of contracts and our method of payment is a documentary letter of credit. In some cases we would consider a transferable, but will never give a divisible.
• We do not do bank guarantees or standby letters of credit. If proof of product cannot be given, the seller may have the option of putting up a non operative performance bond first.
• We do reciprocate with Proof of Funds (POF), but only between mandates etc…so that we can get the Master Fee Protection Agreement (MFPA) signed by the buyer at the earliest opportunity and will only deal with sellers who are ready to provide documentation.
• As far as Saudi Light Crude Oil is concerned, we only deal with secondary contracts; As far as Russian product goes, we always prefer CIF. If we are to do FOB it would have to be a very small transaction no more than 200,000 metric tons per month

When representing sellers:

• Financial information must be consistent with issuer of the Letter of Intent (LOI).
• Only Buyers and/or their Authorized-with-Signature, Power-of-Attorney Mandates are authorized to issue Letter of Intent (LOI) + Bank Comfort Letter (BCL) and sign all necessary documents including Contract + opening of L/C in Seller’s Favor.
• We do not and will not accept Letters of Intent (LOIs) issued by agents or brokers “on behalf of buyer and any unauthorized modification of any document issued by the seller shall render the document null and void.
• After receipt of buyer’s Letter of Intent (LOI) in proper order with all the necessary details of the terms and conditions stated above, we will quote a soft price. If the price(s) are acceptable, we will issue a signed & sealed Full Corporate Offer (FCO) on seller’s letterhead. FCO will be valid for 72 hours only. Buyer will be expected to sign and return FCO to seller within the specified period in order to lock in the price. We cannot guarantee that the price will be the same after 72 hours.

For Financial Instruments related transactions

• We deal with both Spot and Contract trades.
• We deal with both Fresh Cut, Slightly Seasoned and Seasoned Medium Term Notes (MTNs) and Bank Guarantees (BGs).
• Because of our extensive dealings with global providers who have both FED and Euro approval to sell such instruments for Humanitarian and similar purposes, there must be proof of funds upfront. And the funds must be in the control of the Investor. Not someone else.
• Because of our equal involvement with global banks and other financial institutions, and especially when dealing with such contracts, buyers of such instruments have to provide the paperwork FIRST. Until buyers understand this basic rule and provide the Proof of Funds (POF) and the submission documents first, transaction is a non-starter. Banks literally cannot by law solicit and will not.

For GOLD related transactions

• Forget the performance bonds, escrow and parallel accounts, the meaningless SGS certificate, bank comfort letters, table top meetings, and the various attestations and protestations that the product is valid, that title is clear, that people are responsible and full faith, etc……GLD Gold is bought and sold by bullion banks through a bank bullion officer under what is called "Swiss Procedures” which are very simple and direct; and that is the only way we conduct business.
• We represent and work closely with some of the largest GLD (bullion) and non-GLD (dory, gold dust, ingots, nuggets, etc.) buyers in the world.
• All of our buyers work under private placement transactions and require to see Full Corporate Offer (FCO) with clear procedures showing proof of product (POP) FIRST.
• The gold must be in GLD system, the documentation must conform to LBMA standards and the procedure is not reported on the banking systems computer screens.

Looking forward to hearing from you and once again, all my very best wishes for the New Year.

Best regards,

Ziad K. Abdelnour
Members

"FORBES" Magazine

Fad and Comment

Serbian irregulars in Kosovo.

The sensible thing would have been to carve out that Serbian territory and cede it to Belgrade. (See Ralph Peters' excellent Feb. 19 New York Post column on this subject.) That would have been something of a face-saver for Serbia and its Russian patrons when Kosovo declared independence. The Kosovars would not have been happy, but an ugly source of conflict with their angry and much larger neighbor would have been

• Serb enclaves in Kosovo

Montenegrp (' j I

Kosovo

I
Albania
Macedonia

Graceful Giant Gone

WHEN WILLIAM F. BUCKLEY JR. LAUNCHED NATIONAL REVIEW in 1955, he impishly declared that it "stands athwart history, yelling Stop:' He didn't stop history, however; he made it. Few other figures have had the impact on their times that Bill Buckley had on his. Without him, the extraordinary resurgence and reformation of conservatism in American political and economic life that culminated in the presidency of Ronald Reagan would never have come to pass. The US. wouldn't be the mighty and vibrant colossus it is today but rather a pallid and stagnant version of western Europe.

Starting with his 1951 book, God and Man at Yale, in which he takes his alma mater to task for its growing hostility to religion and capitalism, Buckley was at the forefront of making conservatism a potent and dominating force in American life.

National Review was the vehicle for nurturing serious conservative writers and intellectuals at a time when liberalism was ascendant and conservatism was viewed as outdated, xenophobic and anti-Semitic. Under Buckley's leadership the xenophobic and anti-Semitic elements were effectively drummed out of mainstream conservatism, and it became the buoyant, optimistic avoided. A sullen peace would likely have ensued. Instead we have deadly conflict.
Perhaps it is not too late to bring about such a change. After all, NATO has thousands of troops in Kosovo, and the excision of that Serbian enclave could be done unilaterally. (Serbs living in other parts of Kosovo could move there.) Then Kosovo and Serbia could verbally shake their fists at each other while both go about the constructive business of reforming their economies to become part of the EU movement personified by both Buckley and Ronald Reagan.

Buckley also embraced the medium of television. His show, Firing Line, vividly demonstrated the mass appeal of conservatism and the absurdities of liberalism. The program lasted 33 years, a real-world equivalent of centuries.

Buckley was an extraordinarily gifted individual with a stupendous wealth of knowledge. He was a brilliant debater, a magnificent essayist, an excellent novelist, a prolific writer of nonfiction, a first-rate sailor and a legendary wit. One of my favorite Buckley quips: A guest on Firing Line in the mid-1960s pointed out that Robert Kennedy, a liberal icon, was a Buckleyesque conservative as a young man and then turned to the left politically. Without missing a beat, Buckley said, "He peaked earlY:' Another: When Buckley was running for mayor of New York City in 1965, he was asked what heCl do if he won. "Demand a recount:' he famously replied. He even learned to play-and mastered-the harpsichord.

Of course, there have been plenty of other men with considerable talents, but Buckley focused his in a way that profoundly changed the world for the better. Bill Buckley will live in memory as long as liberty lives-which, thanks to him, should be a long time indeed.

Reading Well Is Best Revenge

Stone Cold-by David Baldacci (Grand Central Publishing, $26.99). Revenge is a powerful motivator, and as a dominant theme here it makes for an enthralling thriller as Baldacci seamlessly weaves in several plots. The book revolves around the Camel Club and its head, a onetime CIA assassin, John Carr, alias Oliver Stone, whom most people believe to be dead. The handful of other club members are skilled and adventuresome middleaged eccentrics.

Annabelle Conroy, an honorary club member as well as a superb con artist, has stolen $40 million from a psychopathic casino owner because years ago heCl killed her mother. The psychopath brings his lethally warped gifts to bear in hunting Annabelle down, torturing her partner in the scheme to the point of being brain-dead. Enter the Camel Club to help out Annabelle.

At the same time, a former Navy Seal who is doing contract work with Homeland Security and the Pentagon is systematically killing retired members of Oliver Stone's former CIA unit. This guy is another evil genius at his craft. Enriching this murderous stew is a former CIA director who has his own deep, lethal secrets, as well as a US. senator who is also a former spook and wants to be President.

Reading Baldacci is like listening to a flawlessly performed symphony.

F 28 FOR B E 5 MARCH 24, 2008



 

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"FORBES" magazine