Strong management teams are a critical component in any business transaction
We work closely with passionate management teams who want to maintain or acquire an ownership position in their business as well as management teams tasked with growing their businesses through acquisition.
We’ll help design and facilitate transactions with flexible structures in order to suit the needs of shareholders, management teams, employees, and customers.
Our expertise with private capital supports:
- Management Buy-Outs
- Management Buy-Ins
- Growth Capital
- Partial Shareholder Liquidity
- Key Person/Team Transactions
Management Buyout - Case Study
Dave had been employed for 9 years with a building products company. He began as Vice President of Sales and was promoted to President after several successful years of profitable growth. Dave and three other executives were key managers. The company was owned by a group of investors who had funded the company at inception and were seeking an exit.
Dave approached the owners about Management purchasing the business. Ownership had placed a value on the business of $18.5 million. Ownership was open to the idea of selling to Management, however, they were not confident Management could fund the transaction and were unwilling to finance the transaction themselves. Furthermore, the Ownership group had begun discussions with a few other suitors and did not want to stall the sale process.
Werner met with Management in order to evaluate the merits of a Management Buyout (MBO).
Our analysis confirmed that the valuation expectation was reasonable and aligned with market values. We then worked with multiple banks and private capital sources in order to structure the transaction and secure the best possible terms for the management team. Once the analysis was complete, the structure in place, and Management’s conditions were agreed upon, a formal offer along with financial strength was submitted to the Ownership group.
Management successfully completed their buyout 75 days after submitting their offer. They were able to obtain a 25% ownership stake at close with the ability to increase their ownership stake substantially based on the company’s performance. Within 5 years from the date of closing, management was provided the option to purchase up to 100% of the business with predefined terms and conditions.