Business owners who may eventually sell their company, or grow it by acquiring others, should consider the potential benefits of partnering with or selling to a private equity firm.
Besides buyouts, most private equity firms also utilize “recapitalization agreements,” especially for platform acquisitions. These arrangements can provide owners with significant advantages:
- Business owners receive an upfront cash payment, allowing them to take some “chips off the table”
- Management team and outside professional advisors remain in place
- To facilitate growth, the private equity firm helps with add-on acquisitions and shares expertise, contacts and other resources
- Business owners retain some equity in the company, providing them a potential “second bite of the apple” when the private equity firm later divests (liquidity event)
Private equity firms also bring committed capital, access to financing, and transactional experience and know-how to the table. Their deals often close quicker than acquisitions by other buyers.
Learn how HSC helps owners achieve their strategic growth and exit objectives by providing targeted introductions to private equity firms and strategic buyers.