In the course of evaluating opportunities through its corporate finance activities, Strategic will seek out opportunities to support management teams in acquiring the target businesses. Normally such opportunities will result from the desire by current owners of privately owned companies to sell the business and conditions or objectives are conducive to a transition to remaining management as stakeholders. Preferably, target companies will be headquartered in Texas, have annual revenue in excess of $10 million. Such company situations may include:
· Under the size criteria of corporate or financial buyers, as well as M&A intermediaries
· Too large to be well served by business brokers or FSBO
· Reluctance for “shopping” the business & difficulty maintaining confidentiality in the marketplace
· Significant time, distraction, resource & expertise required to develop and manage the sale process
· Tax consequences of an asset vs. stock may limit potential independent buyers and/or valuation
· Concern and loyalty for the future of management & employees
· Less control in producing a positive outcome
Properly structured, a sale to the management team supported by Strategic’s capital investment, transaction expertise and continuing involvement may likely be the best option available after considering all aspects of the sale process. Additional criteria include sound business model and operating level management, relative meaningful capital at risk by management and seller participation.
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