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Strategic Financial Options for Closely-Held Businesses

profile5The calls come mostly from intermediaries on behalf of a strategic investor who has identified your company as an attractive match. Others come from a supplier or customer who wants you to be aware of a potential opportunity to buy or invest in a struggling producer. Some private equity firms have even made direct approaches to talk about your taking some money off the table and continuing to control the business. Is it just stirring the pot or is there something that might be of real interest?

You’re pretty well informed about how businesses like yours are valued and what strings are attached to raising capital. There is plenty of loose talk about multiples of normalized EBITDA for a debt-free balance sheet with a net asset adjustment for net assets or working capital at closing. You know that non-control investors want some form of downside protection and a put at fair value in five years to get their return if there is no sale.

Even with a keen awareness of activity in your industry, there is quite a lot that is not obvious. What did they really get and what did it really cost? What were the stumbling blocks and the types of issues that they wish they had addressed earlier? There are always factors which can and do have a material impact on deal structures and whether the transaction can even be completed.

Making the most of your situation begins with knowing your strategic financial options and having reliable information specifically relevant to what you might want to do. We work with business owners to answer these questions.

  • Can I improve the financing arrangements that I already have?
  • How attractive is our company to a strategic or private equity investor?
  • What is a realistic valuation for raising equity or selling the company?
  • What would the structure/cost be for subordinated debt to relieve bank pressure?
  • Which investors/lenders/buyers would be most interested and most valuable?
  • How should we finance an acquisition or our expansion plans?
  • How could we recapitalize for partial cash-out or to buy-out a partner?
  • What other alternatives should we be aware of?

StrategicFinancial5MidMarket’s value proposition is to bring our knowledge and insight to conduct a thoughtful analysis that you can use to accomplish your goals. We deliver relevant market data and valuable information along with sound independent advice aimed only at your best interests. We do that on a timely and cost effective basis that in no way limits your flexibility or ties you to a commitment to us. Let us show you what we have done for so many business owners for over 30 years and how we can make that valuable resource work for your advantage.