Capital Ideas for Private Business

Welcome to this issue of Capital Ideas, our newsletter dedicated to business selling, business buying and financial resources for mid-market companies.


There is a New Game in Town for the Seller of a Middle Market Company

All About Special Purpose Acquisition Companies

By Terry Fick, Principal, Corporate Finance Associates
with the collaboration of other parties in the Capital Markets

While more companies are going from public to private to public, there is a vehicle to create liquidity to the owner of a privately held company by selling his company to a "SPAC" (Special Purpose Acquisition Company). SPACs are public company investment vehicles that differ from the blind pool and public shell acquirers of the past. Some SPACs will target a specific industry or geography, while others will be much broader in scope. Including SPACs that have a pending transaction, there are more than 100 SPACs in registration to go public or are already public. These companies are vying for profitable deals, and are paying... Read more »

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Using Mezzanine Financing in Minority Ownership Recapitalizations

An Effective Way to Transfer Ownership

By Samir Desai, Vice President, Key Principal Partners

Tough decisions loom in the distance for entrepreneurs aged 50 and older. As retirement nears, the pressures of maintaining their businesses and planning for their future increase, and questions of “what next?” abound. Characteristic of baby boomers, this generation is hesitant to relinquish control of the companies they’ve spent years nurturing, but they also no longer want to hold an equity stake in those businesses. Mezzanine financing provides an option for those entrepreneurs who want to free up money and time while keeping a firm hand on the business. This type of financing is especially useful for boomers... Read more »

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Feature Acquisition

Situation: After trying unsuccessfully to complete a management buyout by the President and 25% owner, CFA was hired to make a Transaction happen.

Result: Working with both owners, CFA was able to bring the right balance of debt and Private Equity to the table to do a transaction favorable to all parties. The resulting value was 60% above what the owners had originally anticipated. They were able to select from four competing prospects. Taylor is a $160 Million company using 300 semi’s to transport crude oil from wells to Taylor’s pipeline injection points, so the structure had to allow the Cap X of adding new trucks as they grow.

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