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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.


Outlook For 2008

A Private Equity Perspective

By Jeff Johnson , Principal
Northern California Office, Corporate Finance Associates
& Roy Graham , Principal
San Antonio/Austin Office, Corporate Finance Associates

As Bob Dylan sang, "the times, they are a-changing." Against a backdrop of roiling credit markets, ten private equity groups joined 35 of our dealmakers toward the end of February at Corporate Finance Associates' annual winter conference in Orlando. Armed with an ample cache of dry powder in the form of investment capital, our guests joined a panel discussion to share their outlook on deal activity in 2008. With market conditions so volatile, we checked back with our panelists for updates at press time. We think you will be interested in what they said.

When asked whether they plan to invest more or less in 2008 than in 2007, our panelists' answers reflect a general optimism. Aiden Riordan, Partner Calvert Street Capital Partners, expects an increase in opportunities in 2008 "there is a lot of (equity) capital in the market and we could see a very strong year." However alluding to valuations, he observed that, "we could see significant price dislocations." Phil Curatilo, Principal Key Principal Partners is enthusiastic about opportunities for his firm. "We did 16 transactions including 5 platform deals and 11 follow on opportunities in 2007. We invest both sub-debt and equity and therefore have great flexibility. Challenging credit markets exist so we expect to do far more non-control transactions in 2008. 2008 should be a great year for us with more opportunity for
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Staging A Business For Sale

5 Steps to Maximize Enterprise Value

By Robert S. Kheir, Associate
Oakville, Ontario Office, Corporate Finance Associates

Prime time television is littered with design shows, from staging a home for sale to renovating a dream kitchen. Newspaper snow dedicate entire sections to Real estate and Design. All of this media attention caters to North America's fascination with maximizing the value of an asset that represents a substantial portion of their personal net worth: Their home.

For some North Americans who are business owners, their enterprise is their single largest asset. Every day they get up to go to work, they put a substantial portion of their personal net worth on the line. If that's the case, why is so little written about staging a company for sale?

The theory of crosspollination states that if you take the knowledge from one discipline and apply it to another, there is the potential for enrichment. So we've decided to take the bounty of information on staging a home for sale and applying it to staging a company for sale. In other words the world of "Crate and Barrel" meets the world of "Mergers and Acquisitions"
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Feature Acquisition

Situation: John Rockey started his company in 1983 with a single truck. Twenty-four years later, he had grown it into a highly successful transcontinental provider of logistics services to the United States military. Rockey realized however, that he was on the verge of losing control as the company continued to grow. Believing that he had advanced the company as far as he could, he decided he would have to sell. A financial services provider saw that he needed experienced
guidance and introduced him to CFA.

Solution: Upon understanding Rockey's true desires, CFA outlined a recapitalization process which allowed him to extract wealth from his company, while still retaining an attractive ownership position and active involvement in his company. CFA identified a strong investment group willing to invest and commit to active management in the company. With the needed expertise to institute sophisticated systems and controls while bringing new resources and strategic insight, Rockey's new partners form the foundation for future growth of even greater opportunities.

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