In April of 1996, Ramco Capitlal led an investor group in acquiring a minority and non-controlling position in VideoSite, a company whose business was corporate intra-mural web hosting.

Teaming with new management, Ramco acquired a 24% stake in the multimedia company at a $1m pre-money valuation. Ramco worked with new management to upgrade the product offering, build-out the new senior management team and add European and Asian product distribution. VideoSite was successfully sold 15 months after initial investment to Gtech (NYSE: GTK) in October of 1997 for $17.4m in cash, producing a 893% IRR.

Business Criterion
The business model was both rational and robust.

Management Criterion
Jack McDonald's primary objective was to maximize the total return on the shareholder's investment.

Financial Criterion
The company sustained high profit margins due to Jack's tight cost controls.

Market Criterion
In Mr. Matzner's determination, the company was significantly undervalued.