Recapitalization

Owners of privately held businesses typically have a substantial portion of their personal net worth tied up in the companies they have worked hard to build. When considering liquidity and wealth diversification options, however, business owners often ask themselves an over-simplified question: “Should I sell or not sell?” The answer to this question does not have to an absolute “yes” or “no” response. 

By considering an equity recapitalization, a vast menu of sale and liquidity options become available depending on the business owner’s age, desire to remain involved with the business, vision for the business, and liquidity requirements. Simply put, a partial sale of the business to a buyer (a recapitalization) can accomplish many of the business owner’s stated objectives without selling 100% – achieving some liquidity today, providing a path to additional liquidity on a future sale, and securing a deep-pocketed partner that is committed to growing the business.  

Equity recapitalization transactions enable our clients to cash out of their investment in the business and capitalize on the enormous amount of sweat equity they have put into their business over the years.

An equity recapitalization represents an alternative to a complete sale of a company. The original owner can continue as a partner and/or manager of the company, while the new partner is a private equity firm that shares the business owner’s culture and vision for the future. Unlike some acquirers who purchase with a view towards eliminating overhead redundancies, others prefer a more passive or board level involvement and a collaborative relationship with the existing owner and management. 

As partners, these firms can bring strategic opportunities to the company that were not previously available and can provide strategic management experience to assist the company to its next level of growth.

Across North America, there are thousands of groups with committed funds. These groups distinguish themselves in a variety of ways, but they all share the common goal of investing in and growing privately held companies. 

We maintain an extensive network of cross-border banking partners, advisors, investors, and strategic buyers who we actively stay in touch with on a regular basis due to their heightened interests in attractive Canadian-based private market opportunities. To this extent, our Confidential Information Memorandums (CIM’s) go to market in both English and foreign languages to garner direct interest from an incredibly competitive and expansive market in other continents. In the end, every stone is unturned when selling all or some of your company.