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 was growing his company fast. He needed a partner to help him understand what to watch for with a fast growing company and supply the growth capital. Read how a Strategic Equity Investor supplied the growth experience and the capital to help him thrive.
Enjoy
Lee was a third generation owner of a well-known distributor to the coal and construction industries in the Central coal producing area. He developed a value-added service for his core customers. His new service was wildly successful resulting in rapid growth. Lee knew he needed some operating help to continue the growth and still maintain profitability. He needed more than just an investor, he needed a partner with some outside financial resources.
... was founded in 1935 as a specialty distributor of explosives and related products. Lee's grandfather established a strong reputation as a dependable and quality supplier to a broad range of customers in the Central coal producing region. Lee leveraged the Company's distribution relationships with contract drilling and blasting services. The new services quickly outstripped the capital resources of the owner and strained the capabilities of his management team. To get beyond the $35 Million in revenue quickly, he needed an investor with experience in working with rapidly growing businesses and who had the access to enough capital to fund the rapid growth.
Lee found a Private Equity Group that was a Strategic Equity Investor. They committed extensive operating resources to the business, allowed the shareholder to cash out some of his position, yet retain a 35% stake in the business. As part of the transaction, they committed to provide an additional Twelve Million in new capital to support the growth of the business. To Lee, the strategy commitment was as important as the financial commitment.
During the first year after the transaction, the Company was able to significantly expand its base of customers, made possible through the access to growth capital. In addition, the Investor focused the management team on their growth objectives and helped to identify and engage the management resources necessary to continue their strategic expansion.
Lee faced issues similar to many rapidly growing businesses. He was wary of carrying all of the growth risk, was tired of the constant capital constraints associated with rapid growth and was unsuccessful in identifying and recruiting the appropriate management talent necessary to execute on the opportunities before them. He was able to find a Strategic Equity Investor who took the time to understand all his issues and concerns, and address them completely with an appropriate transaction structure.
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 ...
Harren Equity Partners has been a Strategic Equity Investor since inception. Harren's core market focus is companies with less than $100 million in revenues. Within this market, Harren is seeking companies with the following characteristics:
The Harren philosophy is based upon four primary objectives:
Tom Carver, a founder of Harren Equity, said recently "Our approach focuses on operational excellence and insightful strategic analysis, not financial engineering. We believe a partnership with a strong management team is the single most critical element to success of an investment. All of our transactions are structured to provide key managers with significant equity ownership so they share in any improved profitability. While we don't fill operating positions in portfolio companies, we do actively participate in strategic planning and in special on-site project work with management."
Tom followed up with " The combination of a management team's company and industry knowledge and Harren's experience across a broad range of industries creates a dynamic atmosphere, which fosters out-of-the-box solutions to tough problems facing a smaller business. We are not a financial buyer. Rather, we are a Strategic Equity Investor who believes that active operational support, strategic guidance, and operating excellence will yield outstanding financial results. We're not afraid to roll-up our sleeves and get our hands dirty if that's what is required for success at our portfolio companies."
Would you like an introduction to Harren Equity? I will be happy to provide it. Just send us an e-mail ...
For more information on Harren Equity, 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?
Get the
7 Best secrets of managing a Corporate Renewal from Dr. Kash.
