Transforming Daily LifeKoch Business Development
INVESTMENT PHILOSOPHY AND APPROACH Our overall investment philosophy is to purchase assets and businesses at a value that is beneficial not only to Koch companies but also to their counterparties. Koch companies must also see the potential to substantially increase the acquired company’s value and potential. CONTINUOUS EVALUATION A key element of creative destruction is to regularly evaluate all businesses and assets, determining the value they bring to Koch Industries and weighing that against their market value. Over the years, Koch companies have determined that certain assets or entire businesses were more highly valued by others, and as a result, sold or reduced those investments. For example, most of our crude oil gathering business, which had grown from modest beginnings in the 1940s to become the largest system in North America, was sold in 1998. The company has also exited the animal feed production, natural gas liquids processing and several transportation businesses, amongst others. FUTURE GROWTH Koch Industries has historically reinvested as much as 90 percent of its earnings, setting the expectation for continued growth. Koch companies will continue to apply a disciplined approach to identify and capture opportunities and create real, long-term value for customers and the marketplace. This includes searching for prospects to leverage core capabilities in new platforms while seeking to build new capabilities. INNOVATIONS UNDER REVIEW We are continually in the process of reviewing potential disruptive innovations across a broad spectrum of business areas. Investments may be in a wide variety of industries, and will be evaluated based on the quality of the entrepreneur involved, whether they match our proven capabilities of operations excellence, trading excellence, transaction excellence, Market-Based Management® and public sector, and whether they offer extraordinary financial potential. Currently, we believe value can be created through innovations in the following sectors:
To help drive creative destruction, Koch Industries constantly searches for new ways to improve profitability and capture opportunities to create extraordinary value. Koch companies not only want to buy assets and businesses at the right price, but also substantially increase their value and potential.
