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 a company that had been under family ownership since inception. Now, the third generation was assuming responsibility. Read about how the owners achieved a fair cash buyout for their estate, yet passed the business on to the next generation.
Enjoy
Two sisters-in-law, a second generation of a family business were in their 70's. They both needed financial liquidity for estate purposes. They also had three children, two sons and one daughter that were active in the business and wanted to own the firm as the third generation. But, the third generation didn't have the financial resources to pay a fair price to the second generation. And, they ran the risk of IRS audits disallowing capital gains if they sold to insiders.
... manufactured residential lighting products. They specialized in supplying decorative and functional lighting products for the building professional. They sell through a superior network of electrical and lighting distributors. The company started in 1919 and the management was the second generation of the founding family.
A Strategic Equity Investor helped solve their problem. They paid a fair price for the $50 million dollar business. They took a 50% equity position, and leveraged the transaction. The other 50% was split equally between the third generation management.
During the next five years, the private equity group helped the younger management team manage growth, increase the EBITDA and payoff most of the debt. In five years, the family management team came to the private equity group and worked out a deal to buy out the equity group.
Because of the pay down of the original acquisition debt, the management team had the borrowing capacity to pay a fair value to the equity group for their 50% of the business. Now the fourth generation of the family has just entered the business. Maybe in another ten years they will do the process all over again.
Want to transfer your ownership to some of your children, but still get fair value for your estate? A creative partnership with a Strategic Equity Investor can solve that problem over time.
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
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Newcastle Partners has been a Strategic Equity Investor since its inception. Since 1985, the principals of NewCastle have specialized in structuring transactions that provide liquidity to business owners while enabling them to retain significant residual ownership, operating control and corporate autonomy.
NewCastle seeks to invest in established companies in a broad array of basic industries. Preferred company criteria include the following:
Jack Lowden, the founder of Newcastle, said recently "We realize value creation is a result of consistent progress over a period of years. NewCastle maintains a long-term investment horizon. This view allows creation of significant corporate value; it provides enough time for both the implementation of management's strategic initiatives and the garnering or operational improvements.".
And he followed up with "We provide owners of privately held businesses substantial liquidity yet allow them, their family, heirs or outside executives to retain significant equity ownership along with day-to-day operating control. Flexible transactions are structured to satisfy both the financial and personal objectives of the shareholders."
Would you like an introduction to Newcastle? I will be happy to provide it. Just send us an e-mail ...
For more information on Newcastle 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.
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