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Management buyouts can take a number of forms. The objectives of the owners and management must be aligned. Here's a series of Management groups and former owners that accomplished the alignment with the help of a Strategic Equity Investor.
One company had an owner that was inactive, but management didn't have the capital to acquire the business from him. Another had a convoluted structure because of the corporate parent. A third was the only profitable sub of a company in bankruptcy. And, another had a management team that recognized the owner was bored.
Read about all these Management Led Buyouts.
Strategic Equity Investors like to invest capital in growth situations. Capital to grow is significantly different than a leveraged buyout. Here are some examples of completed growth capital investments.
One owner was reluctant to commit more of his family's capital, but still wanted to grow the business. Another fell into a once in a lifetime opportunity, but needed a money partner to be able to take advantage of it. A third had used all his resources to get the company to its current position, but wanted to take it to the next level. And, another needed capital and strategic help to consolidate a fragmented industry.
Read about all these Growth Investments
Picking a partner is almost, but not quite, like picking a wife. You need to have common objectives. You need to be able to work together. But, the relationship does have a finite time limit. So choose wisely. You'll be in bed with your partner for a few years. Here's some examples of some healthy equity partnerships.
One owner knew he had taken the business as far as his management skills allowed. But, he wanted to make sure his partner had the skills as well as the capital to take it to the next level. A second owner already had some partners. But his partners now had a different agenda than he did. A third needed a partner that had the experience of managing a fast growing company. And, here's an owner that was looking for a partner to help with growth that wasn't going to over leverage the company.
Read about all these Partnering with an equity investor.
Over time, the personal objectives of privately held business owners change. Sometimes, different owners gravitate towards incompatible objectives. A thoughtful Strategic Equity Investor can help owners transition successfully.
One company was an orphan of a much larger company. This particular orphan was almost completely ignored by the parent. Another firm needed to transfer ownership between successive generations. A third had to break through its owners limitations. A fourth needed someone to bridge the gap between different objectives because of different ages. And, finally, an owner getting it right the second time around.
Read about all these Helping Companies through an Ownership Transition
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