Ownership transitions for solely-owned middle market businesses are complicated. Why is the owner selling – for business reasons, financial reasons, personal reasons or something else? How much should the owner sell – a minority stake, a majority stake or all of it? Who should the owner sell to – children, management, employees, other shareholders, private equity, family offices, direct institutional investors, strategic buyers or someone else? What is the fair market value of the company? What kind of transaction should the owner pursue – stock, asset or something else? How will a transaction be taxed? What can the owner expect to earn on reinvested after-tax transaction proceeds? What options are available in the capital markets – ESOPs, IPOs, minority recaps, majority recaps, dividend recaps, management buyouts, management buy-ins, generational transfers, charitable remainder trusts, strategic sales, advanced tax strategies or something else? How is value affected by the different options?
Blue River’s Strategic Options Group educates middle market business owners on the full array of options available to them. Toward that end, the Strategic Options Group operates with three overarching objectives:
- Simplify the complex elements of the transition process;
- Clarify the options available in the private and public capital markets; and
- Empower owners to achieve ideally suited transitional outcomes when they are ready.
Blue River’s patent-pending diagnostic tool sorts the driving motivations of each owner into an easily understandable personal profile. Then, through sophisticated algorithms that incorporate the personal motivations of multiple owners, company size, industry transaction activity and other quantitative and qualitative factors, the diagnostic tool identifies the capital market options most closely aligned with ownership and company characteristics.
In the end, the optimal action may be presentation of the company to one of Blue River’s many acquisition clients, securing a majority or minority capital partner to support growth, placement on Blue River’s Private Exchange, running a full exit process, simply sitting tight and focusing on driving growth and identified value levers or pursuing one of the many other options available in the capital markets.
The Strategic Options Group equips owners to confidently and proactively pursue these customized transitional outcomes. Those who depend on the Strategic Options Group gain control over the transitional process.