offers financial security, equity retention, and value gains through deleveraging, accretive add-on deals, and a potential
increase in the exit multiple. In addition to capital, seasoned investors provide strategic oversight, acquisition expertise,
and other value-maximizing advice.
Benefits of a Recapitalization
- Enables the Company’s
shareholders to retain an equity position.
- Significant liquidity available for shareholders.
- Add-on acquisition(s)
could be funded largely with outside equity capital, dependent upon allocation of risk and upside.
- Financial sponsors assist
in building for second “exit” – “exit” may include an initial public offering (IPO).
Drawbacks of a Recapitalization
results in increasing and restructuring debt.
- Less amounts of cash at close vs. strategic sale.
normally stay in business through medium-term (3-5 years).
- Partner ‘selection’ a critical aspect of successful