Private equity funding/recapitalization is ideal for private or family-owned companies that have experienced management teams, stable cash flows and healthy margins, and attractive growth opportunities in strong markets. In essence, it creates liquidity and risk diversification today while setting the stage for a second “payday” down the road.
Recapitalization through ICG can provide the necessary capital for growth – or personal liquidity – all while allowing the current owner to maintain a significant ownership stake.
- Liquidity. Business owners can realize significant personal and/or family liquidity by selling part of the business and extracting 60% to 80% or more of their company’s current value while retaining a disproportionate share of the remaining equity.
- Diversification. Avoids the risks of having personal/family wealth tied to a single business enterprise – allows for prudent diversification of wealth.
- Upside. Entrepreneurs can participate in a “second bite of the apple” in three to five years by maintaining a meaningful ownership stake (20% to 40% or more) and, by aggressively growing the business, create significant additional wealth.
- Management. Owners and existing management maintain operational control of the business and, with new capital partners, can focus on accelerated growth. An employee stock option program can broaden the equity participation to other tiers of management.
- Strong Growth Potential. A well-capitalized partner with deep pockets and extensive business connections sets the stage for strong growth organically and/or through acquisitions.
Private equity funding/recapitalization represents an alternative to a complete sale, and ICG is a leader in creatively structuring these complex transactions.