A flexible liquidity solution using debt and/or equity that can be customized to meet the unique needs of a business owner
How can I diversify my assets and protect my wealth without having to sell my company?
When I am ready to retire, how can I transfer control / ownership to the next generation, whether my children or my trusted management team?
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."
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 |
"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."