Minority Recapitalization
Business owners regularly face difficult decisions trying to meet both personal and 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 |
|---|---|
|
Minority Recapitalization Retain ownership control and preserve operational control |
Majority Recapitalization Ownership control transfers to new majority owner |
|
Minority Recapitalization Obtain partial-liquidity to diversify assets |
Majority Recapitalization More cash to owner at close |
|
Minority Recapitalization Continue to benefit from the success of the business via a potential future liquidity event |
Majority Recapitalization Less economic participation in future growth of company |
|
Minority Recapitalization Family members often want to remain active in the business |
Majority Recapitalization Owners less concerned about transitioning control to family members and/or existing management team |
|
Minority Recapitalization Lower debt / leverage levels |
Majority Recapitalization Less concern about future debt / leverage |
|
Minority Recapitalization Owners can regain 100% ownership of the company by buying back equity |
Majority Recapitalization Very difficult to regain 100% ownership |
Featured Case Studies • Minority Recapitalization
“Main Street has been an invaluable partner…Without their help and support, not only financially but also strategically, we would not be where we are or have the trajectory that we have today.”
Rich Crawford CEO, SambaSafety
View Case Study
"Main Street has been a valued partner for Spectrio and instrumental in our ongoing success. They have financed seven add-on acquisitions. This support has allowed management to focus on growing the business."
Aaron Kleinhandler CEO, Spectrio
View Case Study
"Main Street provided liquidity to achieve my estate planning goals, while allowing me to retain operational control and the right to regain majority equity ownership. They have been true to their word since our initial discussion, have provided valuable insight and resources, and have been the ideal partner for me and CBT Nuggets."
Dan Charbonneau CEO & Owner, CBT Nuggets
View Case Study
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
View Case Study
"Main Street helped me facilitate the recapitalization of our company with a debt and equity investment that allowed my old partners to exit and me to obtain a control equity position. They bring a unique approach to the market that combines exceptionally knowledgeable financial professionals, with an unbelievable ability to be flexible and the potential for a permanent capital partner. Main Street has been extremely easy to work with and has provided valuable insight and industry experience. I couldn’t have asked for a better partner for me and for Hawk Ridge Systems.”
Dale Ford, CEO, Hawk Ridge Systems
View Case Study"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