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 at the top of the list. Here's an owner that wanted to continue to grow his company. His investors had other agendas. Read about how he got the best of both worlds with the right partner that supplied money and knowledge to help him continue to grow the business.
Enjoy
The Founder started his company with some help from several institutional and private investors. They helped finance several acquisitions that served as the genesis for the Firm. The CEO had a vision to aggressively grow both organically and through acquisition. After five years, the investors were unwilling to commit more capital to enable the Company to continue its growth.
... operates post secondary schools serving the growing demand in the U.S. for career-oriented education. The Company is focused on building a strong presence in mid-tier markets by opening new branch campuses and acquiring existing schools. The CEO and many of the other management team members are longtime industry veterans who understand post secondary school operations and the highly regulated environment in which they operate. The CEO needed to find a new partner who shared his vision for growth, understood the industry's demanding regulatory environment and was willing to take out their original investors. A tall order.
The CEO was on the verge of achieving substantial growth with multiple acquisition candidates and plans for new branches and new programs. Revenues and EBITDA at the time were approximately $11 million and $2.0 million. But the CEO needed the right financial partner to push the growth forward.
The CEO didn't want to sell. Quite the opposite. He wanted to grow. He talked with several Private equity groups about partnering with one that met his specific criteria and had prior experience investing in rapidly growing companies. He found one. The equity investor bought out the unsupportive shareholders, committed to future growth, enabled the entire management team to have equity ownership via purchased equity and a newly-established option pool, and secured a large credit facility from a national lender. While the CEO's ownership decreased, he knew it would be far outweighed by opening the door to growth
Within 10 months of the initial investment, the Company completed two add-on acquisitions, the equity group doubled its investment, and the company opened a new branch campus. Revenues grew to $25 million and EBITDA to $7.0 million all with very little debt.
By picking the right partner, a savvy business owner can unleash the growth potential of the business, grow with less personal risk, retain a large ownership interest in the Company, buyout some reluctant shareholders and allow his management team to get equity. That's accomplishing a lot of objectives at one time. And, it was seamless to the outside world. Better yet, the enterprise value of the firm more than tripled in the first eighteen months after closing.
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 ...
Huron Capital has been a Strategic Equity Investor since inception. The cornerstone of its strategy combines capital and transaction experience with proven management teams who have the vision, expertise and commitment to successfully grow their businesses.
The firm seeks to acquire or re capitalize niche manufacturers, value-added distributors and specialty service companies. It will invest in companies with revenue up to $150 Million to facilitate management buyouts, corporate spin-offs, recapitalizations, family successions and buy & build strategies.
John Higgins, a partner in Huron Capital, said recently "We customize our transactions to meet each owner's liquidity, diversification and tax objectives. We work quickly and confidentially to avoid disruption to the business.".
And he followed up with "Our focus is simple. We invest in people. We partner with experienced operating executives who have the drive and passion to build successful companies."
Would you like an introduction to Huron Capital? I will be happy to provide it. Just send us an e-mail ...
For more information on Huron Capital, 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.
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7 Best secrets of managing a Corporate Renewal from Dr. Kash.
