Here is a Case Study of a transaction that one of our Private Equity Investors completed. Periodically, I will send you an interesting case study -- not more than every couple of weeks. If you don't want to receive them, you can "unsubscribe" at the bottom of this message.
As a bonus, I am highlighting one of the Strategic Equity Investors we represent. They will do a transaction similar to this one.
If you have any questions or comments, please send them to me.
Sometimes doing a transaction is about more than just money. In fact, in my experience, money is key, but not always at the top of the list. Here's an experienced management group that had worked with another Private Equity Group. Their prior situation ended up being over leveraged. In starting their new business, the took it as far as they could with their own capital. Read how a Strategic Equity Investor provided capital and experience to help grow their new entity.
Enjoy
A strong management team decided to start their own business. They had been in the industry for a number of years. In a predecessor company, they worked with a Private Equity Group and generally had a good experience. Unfortunately, they ended up being over leveraged and the bank liquidated the firm. Well, now they restarted a business and grew it as far as they could on their own capital.
... designs, fabricates and installs automatic fire protection systems throughout the Southeast. The company provides a full array of new construction and retrofit capabilities to commercial, industrial and multi-family buildings. In addition, through a wholly-owned subsidiary, the company provides fire protection inspection services and maintenance programs to over 1,000 facilities ranging from retail stores to urban office towers including numerous Fortune 500 companies.
But starting a company has some administrative challenges that have already been solved in an on-going business. Accounting issues, legal issues, personnel policies and many others need to be put in place to grow rapidly yet maintain control of the operation. Quick Books is good, but not yet ready for a $50 Million dollar company. And, cash to grow fast is required.
The owners took the business to $15 Million in Sales with an EBITDA of $1.2 Million. Then they reached their limit for financing growth. But, they could easily and comfortably grow the business to $50 Million if they had the capital and a little help with they business systems.
A Strategic Equity Investor liked the concept and particularly liked the management team. They realized they would have to roll up their sleeves to put the right systems in place, but that was part of their value added. So they bought two thirds of the company, let the founders take some money out, keep one third of the company and relieved the founders of their contingent liability of their bank loan personal guarantee.
Not bad for a start. Yet, the Strategic Equity Investor helped the founders build the infrastructure to support a growing business. They worked two to three days a week with the management team to make sure the systems gave them the information that was needed, the right people were in place and the capital was available to grow.
No more bank guarantees. Some money in your pocket. A partner that not only supplies capital, but is willing to get their hands dirty in helping solve a business problem. And, the kicker was the management team received equity incentives that would allow them enough equity to get control when they met their goals.
Private Equity groups have been pigeon-holed as financial buyers and low ball buyers for a long time. Some of their reputation is deserved. But, there are a select few Private Equity Investors that belong in a whole different investment league. To find out why most Investment Bankers think Private Equity Investors are Second Class Citizens and why they are wrong
get a white paper here ...
Brighton Partners has been a Strategic Equity Investor since inception. The firm focuses on smaller, middle-market companies with substantial potential for sales and earnings growth.
Brighton's primary investment focus is on profitable companies with revenue typically ranging from $5 million to $100 million, including traditional acquisitions, management buyouts, and equity recapitalizations.
Dan Broos, a founder of Brighton Partners, said recently "We strive to structure a mutually beneficial partnership with successful business owners or proven management teams in companies that are pursuing an aggressive plan for long-term growth.".
And he followed up with "We are successful private equity investors with hands-on operating experience across a broad range of manufacturing, distribution and service industries. We put patient capital behind the right investment. We focus our style to be compatible with the owners we invest in. We work very well with entrepreneurial owners."
Would you like an introduction to Brighton Partners? I will be happy to provide it. Just send us an e-mail ...
For more information on Brighton Partners, visit their website...
We are specialists. We match privately held companies with the right equity source. We never charge a seller a fee. Working with Strategic Equity Buyers is our specialty.
To discuss which Private Equity Group will meet your current needs, let us know here ...
has partnered with a top notch operations consulting firm:
Allomet specializes in helping equity investors, owners, lenders and other stakeholders assess operational problems, understand how to solve them and help oversee implementation.
Would you like to determine if an assessment of margin enhancement, operational strategy, or crisis evaluation is right for you? For a thorough preliminary consultation let us know ...
has partnered with a turnaround consulting firm:
Business CPR specializes in Manufacturing or Service companies that have revenue between $10 Million and $100 Million.
Would you like more information on specific techniques to managing a company with problems?
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7 Best secrets of managing a Corporate Renewal from Dr. Kash.
