Main Street Capital Corporation

Minority Recapitalization

Minority RecapitalizationMain Street Capital Corporation (MAIN)

Business Owners Regularly Face Difficult Decisions Trying to Meet Both Personal & Professional Financial Goals:

Asset Diversification

How can I diversify my assets and protect my wealth without having to sell my company?

Succession Planning

When I am ready to retire, how can I transfer control / ownership to the next generation, whether my children or my trusted management team?

Growth Opportunities

How can I take advantage of new growth opportunities without having to use my personal assets as collateral?

"The seemingly contradictory goals of tax-efficiently monetizing part of the value of the business and remaining in control can often be reconciled through a minority recapitalization."

What is a Minority Recapitalization?

A flexible liquidity solution using debt and/or equity that can be customized to meet the unique needs of a business owner

The sale of 1% - 49% of a company, depending on what's best for the business and its owners

Debt is typically used in conjunction with minority equity to provide additional liquidity (and/or growth capital)

The use of debt can be tax advantageous, allow for more liquidity, and reduce dilution to existing equity owner

A Minority Recapitalization Provides Liquidity Without Giving Up Control

Minority Recapitalization Majority Recapitalization
Retain ownership control and preserve operational control Ownership control transfers to new majority owner
Obtain partial-liquidity to diversify assets More cash to owner at close
Continue to benefit from the success of the business via a potential future liquidity event Less economic participation in future growth of company
Family members often want to remain active in the business Owners less concerned about transitioning control to family members and/or existing management team
Lower debt / leverage levels Less concern about future debt / leverage
Owners can regain 100% ownership of the company by buying back equity Very difficult to regain 100% ownership

Featured Case Studies Minority Recapitalization

"Main Street has provided J&J’s team with a long-term, strategic capital partner that is well aligned with the core values and growth plans for the business, strengthening our focus and ability to execute on future growth opportunities."

- John Biles, Jr., CEO, J&J