Is your business ready for sale? This is an important question for business owners and shareholders. Why? Companies that are READY for sale are more valuable than similar companies that are not. You also never know when you might be approached by an enthusiastic, or better yet, a motivated purchaser. If that day comes unexpectedly, you definitely want to be READY for sale. A company that is READY for sale is also ready to engage in leveraged repurchase transactions that provide liquidity for some owners and enhanced returns for others. A company that is READY for sale is capable of engaging in a leveraged dividend recapitalization, as well, to provide liquidity and diversification opportunities for all shareholders. And, a company that is READY for sale is also just more fun to work in. This post goes into depth about the components of R-E-A-D-Y.

Managing illiquid, private wealth in the context of The One Percent Solution requires a more active role for business owners and a different level of attention on the business itself. The truth is that between the two bookends of status quo and an eventual third-party sale are many possibilities for creating shareholder liquidity and diversification opportunities and facilitating both ownership and management transitions. This post examines several.

One reason many writers discuss leveraged share repurchases in general terms only is that they involve a company’s current income statement and balance sheet, as well as a pro forma balance sheets and income statements. Further, to see the impact on a company and its shareholders, the changes between the existing financials and the pro forma financials must be analyzed. This post presents an example of a leveraged share repurchase that will help bring the noted benefits for both a company and its owners, both selling and remaining, into clear focus.

In this post, we will examine another partial liquidity alternative for owners of closely held and family businesses, a leveraged share repurchase. This post will address conceptual issues. In the next post, we will develop an example leveraged repurchase transaction to illustrate these concepts and how they really work.

After being involved with many business transactions over many years, I’ve realized that there are at least seven ways that potential investors look at a business. Not every investor will look from every perspective. There are, of course, financial buyers and strategic buyers, and their perspectives will likely not be the same and not all perspectives will be relevant for every company. However, these various perspectives are worth discussing for your consideration.