Ownership Transitions

For virtually every business owner, a vast majority of their personal net worth is directly tied to the ownership interest in their business. Whether an owner is 35 or 65, it is never too early to begin planning one’s liquidity strategy. What is a liquidity strategy? Basically, it is a plan for a business owner to monetize a portion, and ultimately all, of their largest investment – the investment in their company.

Owners and senior managers of successful businesses invest many hours on designing sales plans, marketing budgets, production schedules, etc. which are all key to running and growing the business. However, few take as disciplined of an approach in designing liquidity, succession, or exit plans to ensure all of an owner’s effort can ultimately be monetized in the most effective manner possible. Whether a business owner is seeking liquidity for diversification, retirement and estate planning, or even capital for a new venture, the process of maximizing the value of the business needs to be coordinated by a professional.

Prior to considering an engagement, PPC meets with the principal shareholders to understand their liquidity objectives. Whether you are considering a full business sale, partial liquidation, desire to sell your business to your management team (e.g., MBO), are considering an ESOP or another type of a transaction, PPC can identify, evaluate, and advise on all of your alternatives. Our role is to “quarterback” an engagement, coordinating all of the necessary parties, to ensure a confidential and effective marketing process for your company. We are well versed on both strategic and financial acquirers, work with investor groups that seek majority or minority investment positions, and have access to tax expertise to ensure a transaction is structured in a tax beneficial manner.

A liquidity event in the lifecycle of a company is not a common occurrence and is a first-time event for many business owners. Having never done it before, many business owners still attempt to manage a transaction process on their own, with maybe the help of their CFO and their lawyer. The result is inevitably a loss of focus by senior management, followed by lost opportunities, unexpected financial or operational events, and ultimately frustration from time wasted. Transactions grow more complex every day and the process needs to be managed by an experienced investment banker to allow the business owner to do what they do best – remain focused on their business.