Recapitalizations
Have you ever wanted to grow your business and/or minimize your financial risk but are not ready to sell or retire? If so, a recapitalization may be a great option for you.
A recapitalization is where one effectively sells shares (or issues new shares) to a new owner, but continues to retain some level of ownership in their company. The new owner may end up as a majority or minority owner, depending on their level of investment, but they are typically a financial partner in the business. In most cases, the original owner will continue to run operations on a day-to-day basis.
The benefits of a successful recapitalization can include:
- Reducing financial risk in the business by taking some chips of the table today
- Providing growth capital by partnering with a well-funded financial buyer
- Accelerating growth faster than would be possible independently
- Access to industry, management and board level resources and support
- Accelerated growth of remaining equity ownership
Recapitalizations are not for everyone. Typical situations of a good recapitalization candidate include:
- EBITDA in excess of $1.5 million-2 million annually
- Excellent growth prospects
- Attractive industry focus
- Strong owner/management team that want to be involved in the future of the business
To learn more about recapitalizations call 719-579-9090 or email info@biggskoffordcapital.com.
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