The above infographic illustrates the various uses of funds raised from a minority recapitalization. A minority recapitalization, also known as a “minority buyout”, is an alternative means of raising capital to generate liquidity. In a minority recapitalization, leverage in the form of senior debt, mezzanine financing and/or preferred equity can be provided to an existing, positive cash-flow generating business.
Financing from a minority recapitalization can be used for a variety of capital needs, while allowing the active shareholders to retain majority control of the business, as opposed to a majority recapitalization or outright sale of the business. The company’s future cash flow is then used to repay indebtedness in subsequent years.
Interested? We would be happy to discuss how minority recapitalization could work for you.