Welcome to this issue of Capital Ideas, our
newsletter dedicated to business selling, business buying and
financial resources for mid-market companies.
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...
Financing in Minority Ownership Recapitalizations
An Effective Way to Transfer Ownership
By Samir Desai, Vice President, Key Principal
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 »
Situation: After trying unsuccessfully to complete a management
buyout by the President and 25% owner, CFA was hired to make a
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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