By John Hill, managing partner, Hyde Park Capital
For many business owners we work with, their most valuable asset is their business. When monetizing the business, and developing an exit strategy, various deal structures can be considered.
In addition to traditional corporate acquisitions of 100% of their company, many of the business owners we advise currently realize the benefits of selling a portion of their business, often between 60-80%, to achieve greater financial security and peace of mind.
This “recap” sale strategy involves taking some “chips off the table” to secure the company’s current value and protect against future market volatility and unpredictable events, such as black swan events. At the same time, it allows for potential upside with remaining ownership and continued growth supported by a financial sponsor.
Considering Selling Part of Your Business?
Divesting a portion of a business can provide owners with enhanced financial stability and peace of mind by realizing significant capital and personal risk diversification.
Hyde Park Capital has guided many business owners through this sale process, helping them make informed decisions on when to sell and evaluate various merger and acquisition structures.
By selling a part of your business, typically a majority interest, owners can still benefit from future growth using external capital to expand the company, which may increase the value of the remaining shares and offer further long-term wealth opportunities.
With extensive experience from working on hundreds of deals, Hyde Park Capital brings unique insights that go beyond transactions. We understand the M&A market deeply and focus on maximizing value for our clients. Our rigorous, targeted approach to managing deal processes helps owners identify opportunities for outlier pricing, ensuring the best possible outcomes.
Competitive Buyer Pool – Process Outcome
As an example of Hyde Park Capital’s success and commitment to achieving the best outcomes for our clients, one recent client was approached by two strategic buyers with verbal preemptive offers to purchase the company. While both buyers were a logical fit, the seller engaged with HPC to run a competitiveness process, aiming t potentially increase the transaction value.
As a result of HPC’s sale process, each preemptive buyer increased their offers, while new buyers submitted bids. One of the preemptive buyers increased their offer by 40% while a new buyer came to the table at a 70% higher value.
In this example, HPC managed the M&A sale process through competitive dynamics, strategy and negotiation to provide the client with the maximum value for their business.
John Hill is the managing partner of Hyde Park Capital where he has executed hundreds of transactions, including M&A, financial advisory engagements, initial and secondary public offerings, private placements of equity and debt securities, and fairness opinions. Hill is a former director and chairman of Florida Venture Forums, the State of Florida Investment Advisory Council, and a former board member of the CEO Council of Tampa Bay.
