ALTERNATIVE LIQUIDITY FOR SELLERS

Sellers of companies occasionally find it difficult to sell their company for the following reasons:

  1. The Company is non-core to traditional buyers
  2. The Company’s profit margin is too small
  3. A Lack of buyers who can be identified
  4. Buyers offer too low a price to the seller

Every so often we come across a seller who has $1 million EBITDA and a buyer cannot be found for the business. In this case we might want to offer another financing solution

  1. We list the company on a public exchange such as Germany
  2. We expand the company by bringing in equity capital
  3. We increase the market cap valuation of the company

This strategy enables the seller to gain the following benefits;

The seller obtains liquidity by selling shares in public market and gains more value from their holdings by going public. The seller can expand the business operations with equity capital otherwise not available to a privately help corporation. The seller can also borrow against his public shares as a source of tax free funds. The seller has the opportunity to use his public stock as currency to acquire other companies. After selling said the shares, the seller can still retain overall control of company.