Sygnus Deneb Investments (SDI), which began operations in January 2020, is a regional Private Equity (PE) investment company, dedicated to providing equity and mezzanine capital in the key growth industries. SDI focuses on investments in medium-sized companies with revenue ranging from US$5 million to US$50 million. The Firm invests in Private or Public Companies via Equity, Convertible Preference Shares, Subordinated Debt, and other hybrid securities with equity components.
The investment objective of the Company is to provide investors with attractive equity returns by strategically investing equity capital in a portfolio of companies that have strong opportunities to grow revenues and profitability, potential for significant upside in valuation and attractive exit strategies (IPO or sale). SDI has a target investment IRR of 18 per cent with a potential dividend pay-out ratio of up to 85 per cent of net profits.
There are a broad range of sectors targeted by SDI inclusive of Distribution, Financial Services, Manufacturing, Energy, Information Technology, Consumer Retail, Food & Beverage. SDI focuses on investing at various stages of the business cycle, including Expansion, Mature, and Opportunistic.
Generally, SDI prefers to take a significant minority stake in well run companies, with a targeted exit timeline of five to seven years. The equity investments are ideal to support companies in their growth endeavors when at their debt capacity as seen by their debt-to-equity ratios being at the maximum of sustainable leverage. As such, they require equity capital to grow and execute their business strategies over the medium to long term. SDI partners with these companies that have a great affinity to generate positive cashflow or are already generating significant cashflow. SDI also provides entrepreneurs with the opportunity to monetize a part of the value in their company as they prepare to exit the business.