recapitalization can be the first stage of a stepped exit strategy for a business owner. It could also be used to buy out a partner, provide growth capital for the company or used to simply "take some money off the table" for the business owner in order to diversify their risk. The transaction is not a sale of the company and doesn't have to result in a relinquishment of control. It is a restructure of the company’s value using outside capital.
VergePointe are experts at creating customized financial solutions for their clients. Recapitalizations can be a great tool and can produce the following benefits:
- Liquidity and diversification
- Elimination of personal guarantees
- Retained upside for owner – "second bite of the apple"
- Retained business culture
- Ability to reward current management team with ownership
- Ability to attract future management team members with ownership
- Minimal impact to company or industry