Is Private Equity the Right Solution for Your Exit?

Private Equity Groups (PEGs) are disciplined buyers of lower middle-market companies. Most have cash funds and lender relationships in place for the right acquisition opportunities.

PEGs often recapitalize a company, where they purchase a majority or minority interest. They bring growth capital and business acumen to unleash the company’s full potential. A recapitalization gives the owner substantial liquidity now, and a second hopefully larger bite of the apple in 3-7 years. PEGs can also be a capital solution for family succession and management buyouts, often giving equity opportunities to key managers.

One common PEG strategy is to acquire a “platform” company and grow it through complementary “add-on” acquisitions. If your company has $10 million+ revenue, strong profitability and a capable and committed management team, it may make a good platform acquisition for the right PE firm. Add-on acquisitions can be smaller in size.

According to PitchBook Data, about 4,000 PE deals are completed annually in the U.S.  Exit Strategies’ PEG database includes over 3,000 PE firms.

All private equity groups are NOT created equal!

Over the years, from past sale engagements and through groups like ACG and M&A Source, Exit Strategies has developed relationships with hundreds of PE firms. We know their target markets, investment criteria and modus operandi. Exit Strategies can introduce you to appropriate PEGs and strategic buyers when we take your company to market. They are familiar with our structured M&A sale process. We can also present a company (without identifying it) to appropriate PEGs, to gauge demand and get valuable feedback, and possibly even sell, before going to the general market.

PARTIAL list of PEGs that Exit Strategies has personally met with in the past year:

Don’t hesitate to contact an Exit Strategies M&A advisor to discuss private equity activity in your industry and whether your company is a strong PE platform or add-on acquisition candidate, or whether a sale to or recapitalization with a private equity group would be appropriate for your circumstances and objectives. Al Statz is the founder and president of Exit Strategies Group. He is based in ESGI’s Sonoma County California office. Contact Al at 707-781-8580 or alstatz@exitstrategiesgroup.com.