Transact Partners assists Business Owners in locating growth capital for expansion and/or acquisition financing. In addition, we work with owners that are seeking to take capital out of their business to buyout a non-active partner, improve the balance sheet or for personal/estate planning purposes. In most cases, these transactions include some portion of the owner’s equity in the company.
Many Private Equity Groups will make both minority and majority investments in mature, growth oriented companies that are seeking capital for future expansion. Candidates for growth investments must demonstrate a history of consistent revenue growth and robust operating profits. In most cases, these companies are simply unable to generate sufficient cash to fund major expansions, acquisitions or other initiatives. Most commonly, growth capital is used for the following purposes:
- Strategic Acquisitions
- Provide working capital for organic growth
- Product line extensions and/or complementary product offerings
- Production capacity investments
- Restructure Operations
Candidates for growth investments must have a strong management team in place with a solid, long range strategic plan.
Many owners desire a liquidity event to achieve personal objectives, for estate planning purposes or to buyout of an inactive or retiring partner. If the equity in the business represents a majority of the owner’s net worth, the idea of monetizing a portion of their “investment portfolio” while remaining active in the business is often an appealing option. This scenario is best achieved through a Buyout or Equity Recapitalization with a Private Equity Group.
Private Equity Groups will structure a transaction that meets the needs of everyone involved in the deal including management and shareholders. Typically, a transaction offered by one of these organizations will fit into the following categories:
- Equity Buyout – Private Equity will acquire a majority stake in the business. The owner may have the option for “trail” equity and receives compensation for running the business.
- Management Buyout – Private Equity will invest in, and with a strong management team to acquire an operating division/subsidiary of a larger company or with the purchase of a privately held company. This is relevant in situations where the owner wishes to exit the business and not retain an equity position.
- Recapitalizations – Private Equity provides the equity capital and arranges the debt financing to provide the current shareholders of a business with partial liquidity. Recaps are typically used to provide founders with partial liquidity, buyout a non-active/retiring partner or improve the balance sheet. The ownership or current management will continue to operate the business on a daily basis.
Please contact Transact Partners at 919-844-2929 or through the contact form for more information on these investments. All information, inquiries and conversations are held in complete confidence.