| Recapitalization
With today's improved merger and acquisition market and
increased valuations for privately owned companies, many
business owners are considering selling their company
to gain liquidity for the asset that usually represents
the majority of their wealth. Generally, most successful
privately owned companies are worth more than their book
value. This higher value or "going concern"
value is attributable to a company's ability to generate
consistent earnings and cash flow growth over an extended
period of time. A recap can be a feasible alternative
in the right circumstances to access this value for purpose
of providing capital to:
- Fuel
future growth,
- Buyout
current shareholders,
- Personal
diversification of wealth outside of the business, and/or
- Retirement
and estate planning purposes.
Successful recapitalizations feature a good relationship
between the business owner and the investor—a relationship
in which both parties are focused on the company’s
continued growth. In fact, if the owner has an ongoing stake
in the business it makes the investment more attractive
to investors, because in the near term transition and operating
risk is minimized.
Tunstall Consulting will work with management to evaluate
the company’s growth plan and identify an optimal
capital structure and financial partner. Utilizing Tunstall’s
extensive relationships with public and private capital
sources, we will assist our clients in identifying and accessing
the appropriate forms of financing and in selecting the
right financing institution to complete the transaction.
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