Recapitalization & Taking The Second Bite Of The Apple
Gene Sartin & The Transition Companies Suggestions For Owners
According to Gene Sartin, there are many advantages in a business Recapitalization. For owners of privately held Companies and clients of The Transition Companies, the primary advantage of this process is the availability of immediate cash. A portion of the market value of the business will be paid at closing. This allows the business owner to diversify his or her net worth realizing other business or personal goals, or pursue a Lifestyle Change.
With the assistance of The Transition Companies professionals, private Companies, who may be doing alright, can gain an experienced financial partner and investor to take them to a new level. Investors are usually very experienced in assisting Entrepreneurs in realizing their ultimate long term Business and Personal Goals. An equity partner will focus on supporting current management abilities to achieve significant growth and profitability. The owner, on the other hand, usually retains hold of managing day to day operations and plays a key role in the implementation of growth strategies.
After years of taking risks to grow the business, as explained by Gene Sartin, the business Entrepreneur often tends to become more conservative in decision making and reluctant to aggressively pursue new ideas. The investor is the very opposite usually. The two converging creates a balance that makes for wise but significant growth strategies.
This M&A strategy implemented under The Transition Companies process, often referred to as "two bites of the apple", presents a business owner with the opportunity to get paid twice. Potentially, this creates an even greater opportunity than a conventional M&A Transaction. The greatest payout to all parties occurs after the business has achieved a new and elevated level of growth. The second payout for the original owner will often proportionally exceed the "first bite" payoff.
A partial sale of a business according to Gene Sartin is no different than a full sale in the method of choosing an investor. The beginning of The Transition Companies M&A procedure is the same as a full sale, and the objective of attracting the greatest number of suitors and structuring the most lucrative deal is all the same.
Private Equity investors are unique in their expectations, motives, strategy and culture. The investment group selected by the owner will have a significant influence on the future of the company. The desired objective in hiring The Transtion Companies is to find several suitors when possible to choose from.
As Gene Sartin reminds everyone, the execution of high quality liquidity event like this is not for the faint of heart, but it is worth the effort. Advice from The Transition Companies professionals can make the process the very best it can be.