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Exit Options
What is a Private Equity Recap and Is It Right for Me?
A private equity recapitalization is a financial acquisition technique primarily used by private equity groups and/or private investors. It allows a business owner to sell a portion of the business, but still retain some equity to take advantage of future growth. A private equity recapitalization gives owners the potential to crystallize the value of their retained equity for a second time when the company is sold again by the private equity investor. Private equity recapitalizations are commonly used to fund an expansion of the business or to pay down debt.
Private equity groups are savvy business partners who bring more than just capital to the table. They provide industry, operational and organizational expertise that can increase the value of a business. Partnering with a private equity firm through a recapitalization allows the business owner to diversify most of their personal risk, while remaining with the company over a longer time horizon.
A private equity recapitalization releases the business owner from carrying personal guarantees on the company’s debt, making this strategy very attractive for owners who are tired of having their personal balance sheet exposed to the company’s ups and downs. It can also allow for a smoother succession plan because the private equity group is motivated to deepen the management team and reduce the responsibilities of the existing owner.
Most private equity groups are looking to grow the business 15-20% each year for 5-7 years before exiting – allowing the business owner a second “bite of the apple” once that happens.
Is it right for me?
- Do you want to take a majority of your chips off the table?
- Do you still want to work (very likely at a greatly reduced capacity) to help grow the business?
- Do you believe the business still has room for growth and that additional capital with a fresh new partner perspective might help?
“AXL is revolutionizing how businesses are sold”
An option most have never considered
Selling Outright Vs. Taking Chips Off the Table
“Owners of privately held businesses typically have a large portion of their personal net worth tied up in the companies they have worked hard to build.”
“Should I sell or not sell?” The answer to this question does not have to an absolute “yes” or “no” response. By considering a private equity recapitalization, a vast menu of sale and liquidity options become available depending on your age, desire to remain involved with the business, vision for the business, and liquidity requirements. Simply put, a partial sale of the business to a private equity buyer (a recapitalization) can accomplish many of your objectives without selling 100% – achieving some liquidity today, providing a path to additional liquidity on a future sale, and securing a deep-pocketed partner that is committed to growing the business…
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Private Equity Recapitalization Advisory Services
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Business Valuation
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Leaders in our field
How We Can Help
We bring decades of transactional experience to the table and will only add value in helping you achieve your goals. Unlike the others, we guarantee that by NOT charging any retainer, engagement fee, or any other type of up-front cost. We ONLY get paid when YOU DO.
here to guide you every step of the way and answer all of your questions
Most owners sell a business once in a lifetime. We have done it hundreds of times and will share all of that wisdom.
Largest registry of buyers
There are over 4480 Private Equity groups with committed funds and we have relationships with, and access to, most of them.
Options you've likely never heard of
Sell outright once, sell the same business twice, double the value with our proven system to sell it in the future.
integrity beyond compare
We will not sell your business unless YOU feel it is the best possible deal and so do we. Your success is our success. Literally.
Value Building
Perhaps it’s Time to Build Instead?
The Value Builder System™ is a statistically proven methodology designed to improve the value of a privately held business. At the core of the system is The Value Builder Score™, an evaluation system driven by an algorithm that evaluates a business on the eight core value drivers acquirers take into consideration when buying companies. The Value Builder Score™ gives a comprehensive assessment of the “Sellability” of your business, whether you want to sell next year or just to know that you’re building a valuable asset for the future.
After analyzing more than 30,000+ businesses, analysts at The Value Builder System™ have discovered that companies with a Value Builder Score of 80+ received offers that are 71% higher than the average-scoring business. With a score of 90, your value will likely be DOUBLE!
The Value Builder System™ is available exclusively through an experienced and authorized group of advisors, known as Certified Value Builders™ like the advisors here at AXL…
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AXL, LLC
333 1/2 S. Main St,
Rochester, MI 48307
248.712.3775
info@axlequity.com