This type of transaction involves backing family management in buying ownership from a senior generation or from outside shareholders. Working with Propel as a financial partner for growth, active family operators secure operating control and significant equity ownership in a family succession transaction. In addition, the selling shareholders achieve liquidity to meet personal estate planning and net worth diversification objectives. Propel has worked with many family businesses, and is well aware of the need for discretion and confidentiality.
Propel has a successful history working with incumbent managers to acquire companies, which they run, but do not own. Propel adds financial credibility to management’s ability to complete the buyout. Managers then earn an equity stake in conservatively capitalized companies while retaining daily operating control. Managers gain Propel as a well-funded, knowledgeable partner to help them grow the business. Propel principals invest their personal funds and intellectual property along with that of management’s.
Propel backs outside management in the acquisition of a company where the chief executive’s departure leaves the business with a management void. Propel also partners with qualified managers with a specific acquisition candidate in mind. Alternatively, Propel has the ability to find suitable management when required.
Management Buyout of a Corporate Division
As a result of our corporate finance and operational experience, Propel’s principals have created an extensive network to call upon for proprietary transaction flow, transaction related or add-on financings, and executive management expertise. This network’s input and guidance can be instrumental to creating incremental equity value in a portfolio investment.
Propel backs management or business owners in acquiring other companies within their industry. Using its financial resources and acquisition expertise, Propel can assist managers or business owners who are seeking strategic acquisitions, or acquiring and integrating a number of companies within a fragmented industry.
A recapitalization is an ideal solution for an owner who wishes to sell a portion of his or her company for liquidity or estate planning purposes, while retaining significant equity ownership to participate in the company’s upside. This structure allows the owner to achieve personal liquidity without sacrificing operating control of the company. The owner also gains Propel as a financial and strategic partner to assist with issues of future importance. Additionally, this transaction eliminates all personal guarantees tied to the company.