Potential investments have strong brand identity or market position; the likelihood for improved productivity or cost reductions through reorganizing or redeploying capital into core businesses; and the capability of generating a recurring revenue stream and stable, predictable cash flow with long-term growth. Critical to this strategy is to target companies with a narrow set of addressable issues that represent opportunities if accompanied by the appropriate resources and a sound business plan to effect change. Core to Wellspring’s investment strategy is the principle that investment returns are maximized primarily from growth in profitability and secondarily from the use of financial leverage. When evaluating acquisition-financing alternatives, Wellspring works with management teams to determine the appropriate amount of leverage based upon the financial dynamics of the industry, the company and the financial markets, as well as the nature, extent and timing of expected improvements in profitability and cash flow.