A recapitalization or Phased Liquidity Transaction is commonly used when a business owner who is actively involved in the operations of the company would like to generate liquidity without completely exiting the business. Our Phased Liquidity Transaction allows shareholders to convert a portion of their equity into cash to diversify investment holdings and lower their risk profile, all while maintaining operational control and a significant ongoing equity stake. After the transaction is consummated, typically with a private equity group or institutional investor, the company also has a partner with additional agricapital or food capital to assist in funding future growth and a board member with new industry contacts and strategic insights. A Phased Liquidity Transaction offers a viable alternative to the rigors, expense and regulatory scrutiny of taking a company public.

The Phased Liquidity Transaction offers many benefits to business owners:

• Lower the percentage of their net worth tied up in the company and eliminate all personal guarantees of company liabilities.
• Convert up to 90% of equity to cash, while maintaining a 20% to 25% ownership interest.
• The business owner continues to operate the company while participating in its growth. As the new equity partners in the company typically plan for an exit in five to seven years, the owner can expect another significant payday.
• Provides the opportunity to allow key employees to become shareholders.
• The capital providers in the Phased Liquidity Transaction also have additional funding sources to grow the business. This allows the owner to quickly respond to opportunities in the industry.

Participating as your advisor, we ensure you find the best combination of private equity and mezzanine and asset lenders and  then help you structure and negotiate the best transaction.