Options From The Transition Companies Chicago & Gene Sartin.
Recaps: Sell A Portion Of Your Company Instead of All The Company.
Gene Sartin of The Transition Companies advises future clients that there are options other than selling all of your company. When a business owner feels the need to reduce their exposure in having so much of their family wealth tied up in the company, but there is a reluctance to sell the company in its entirety, a Recapitalization or partial sale might be in order. In elementary terms, a Recapitalization is a partial sale that allows business owners to divest a portion of the company to a Private Equity investor. The investor group puts their investment into the company, yet allowing the owner to partially cash out of the business while retaining some portion of ownership. The owner stays on to participate in the future growth of the company. This creates a new team of business owner and experienced financial partner who together are capable of expanding the enterprise in new a creative ways. The Transition Companies has helped many clients in this process.
As explained by Gene Sartin, a well structured Recapitalization makes the investor open to put new money, or Capital, into the enterprise. The seller now retains partial ownership, which could be worth much more money as the environment improves and/or the business grows to new heights. Recapitalization create liquidity for the current ownership. Both the new investor and the original owner participate in the upside of expansion and future profits. The seller gets to realize what The Transition Companies calls two bites at the same apple, money now and more money in the future when the business is subsequently put on the market again.
A Recapitalized Business through the assistance of The Transition Companies can also permit creative entrepreneurs to be considerably more aggressive. This is possible since their personal wealth is no longer solely tied to this one entity. The efforts of both interested parties, Gene Sartin explains, can create much larger Companies that will sell at a higher price at the end of the complete Transition.
The well structured Recapitalization with the appropriate Private Equity investor can provide a business owner with interesting flexibility and a broad range of advantages, both personal and financial.
The Execution of such a high quality liquidity event is not for the faint of heart according to Gene Sartin, CEO of The Transition Companies. But the result for all parties is worth the effort.
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