Excellere Partners

Entrepreneurs : Recapitalization

As the owner of a highly profitable and growing business, you are a successful entrepreneur. For a variety of professional and personal reasons you may be considering your liquidity options. Choosing the best option will likely be the most important financial decision you ever make – especially since you may encounter this opportunity only once.

So how do you access the value in your business without compromising your personal, business, and strategic goals? Conventional options for owners include:

Selling the Business Outright
Selling to a competitor, strategic buyer, or financial buyer provides immediate liquidity. An outright sale, however, may not address all of your personal objectives if you are not ready to retire, if you want to participate in maximizing the potential growth of your business, and if you want to reward your senior management team and key employees. Further, your concern for the future well-being of your management team and employees may not be adequately addressed.

Taking the Company Public
An initial public offering (“IPO”) potentially provides a high market valuation and capital to grow. Small cap, publicly held companies however, that have no sell–side analyst coverage or market makers make it more difficult to achieve liquidity and maximum value.

Employee Stock Ownership Plan (“ESOP”)
An ESOP allows owners to gain some liquidity and provides potential tax benefits. It involves additional debt, guarantees, and administration costs. It also may limit the ultimate growth of the business, and leave management transition issues unresolved as well as a structure that is difficult to reverse.

Excellere Recapitalization Structure
Another option is a recapitalization transaction with Excellere. We believe a recapitalization transaction may offer “the best of all worlds” as you consider the future of your business. To learn more about a recapitalization transaction click here.