CASE STUDIES

Owner Transition Situation

Founder in his early 90’s and not accustomed or comfortable with modern business conditions (Representations & Warranties, Contractual Requirements, Leverage etc).
Founder in his early 90’s and not accustomed or comfortable with modern business conditions (Representations & Warranties, Contractual Requirements, Leverage etc).
Founder and his wife had gifted 50% of the business to their two daughters and retained the remaining ownership.
Engaged to try and effect a sale transaction and maximize sales proceeds.

Solution

Explored and understood family dynamics.
Ran a discrete and selective competitive process and brought three strategic Purchasers to Term Sheets.
After preparation of full legal documentation with the selected Purchaser, Founder was not comfortable with certain terms common in current business practices like Representations and Warranties.
To address his discomfort and move forward, the 50% still owned by the Founder and his wife was sold to their daughters for a Promissory Note that accelerated upon closing with the ultimate Purchaser.
Took the Founder and his wife out of the documents—NO REPS & WARRANTIES!

Owner Transition Situation

Presented with the goal of transferring ownership from the Son of the Founder (deceased) to the Grandson of the Founder.
Management Grandson then in his early 50’s had been responsible for growing the business from <$10mm in sales to $35mm in sales.
Another Grandson was a non-management salesman and the Granddaughter was part-time General Counsel.
Management Grandson wanted to preserve business ownership and management opportunities for his Son and enable the financial exit of his Father (Founder’s Son).

Solution

Ran a process which culminated in a cash-out of the Founder’s Son and leveraging of Company to facilitate ownership transfers to other family members through a lower valued stock (larger ownership transfers inside estate and gift tax limits due to leverage).
Management Grandson retained 35% ownership, other 2 Grandchildren retained 5% and incentive shares for 3% were reserved for non-family key members of management.
Selected Private Equity firm funded the cash, provided growth capital and added branded board members with significant international business experience, contacts and expertise.

Owner Transition Situation

Two owners/ key members of the management: One in his late 50s and other one in late 30’s.
The younger one had been granted options to increase his ownership to parity but did not have money to exercise.
Service Business with minimal assets against which to leverage.

Solution

Ran process for competitive selection of a Private Equity Group that funded recapitalization financing providing liquidity for both owners; enabling a recasting of ownership splits.
Two original owners retained almost 40% of the Company and reserved 4% incentive shares for a rising layer of the new key managers.
Selected Private Equity firm funded the cash, provided growth capital for two add-on acquisitions and added branded board members with significant international business experience, contacts and expertise.