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Equicapita - Would your business be worth more if you were never there?
Equicapita - Would your business be worth more if you were never there?
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Equicapita - Would your business be worth more if you were never there?

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Equicapita is a Calgary-based nano-gap private equity fund focusing on acquiring Canadian SMEs that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita …

Equicapita is a Calgary-based nano-gap private equity fund focusing on acquiring Canadian SMEs that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita generally seeks to acquire businesses: at what it believes are reasonable prices; with a demonstrated history of free cash flow greater than $1 million per annum; with a durable competitive advantage; that operate in industries that Equicapita believes have sound long-term macro prospects; with ongoing participation of senior personnel; with the ability to maintain the cash flow without disproportionate amounts of new capital; where Equicapita can partner with management and align their interest with Equicapita through tools such as earn-outs, vendor take backs and management incentive plans; to be held for the long term; where there is some potential to grow sustainable free cash flow, but where that growth is not essential to generate suitable returns.

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  • 1. 1Why Would Your Business Be Worth More If You Are Never There? Why Would Your Business Be Worth More If You Are Never There? To us this seems to be obvious but it is not always clear to business owners – the simple answer is that a business that doesn’t require the owner to be present, signifies a business that either has exceptional management in place or terrific systems that the managers follow, either one is an indication of a business that is readily saleable, is not based on the personality of the owner and could be purchased by either a strategic purchaser or a financial purchaser because the business would not have to be totally overhauled. On the other hand if a business owner is present each and every day and is responsible for all business decisions the business is merely a job for the business owners that requires day to day policing and oversight. Essentially this falls into the same category as intangible assets. A company that does not require the owner to be present each and every day is indicative of one that has complete and comprehensive operating procedures and manuals. Detailed standard operating procedures and manuals in place show a business that is serious about making processes consistent and it is uncanny how often these types of systems translate into greater profits and reflect the top performing companies.
  • 2. 2Why Would Your Business Be Worth More If You Are Never There? ABOUT EQUICAPITA Equicapita is a private equity fund that acquires established, private, small and medium sized enterprises (“SMEs”) located primarily in Western Canada. Equicapita’s investment drivers are to acquire operating companies at attractive valuations, with a history of generating sustainable cash flow and proven management teams. Equicapita believes that there is: - a generational opportunity to acquire ‘baby boomer’ SMEs; and - a funding gap in the $2 to $20 million enterprise value range. The retirement of baby boomer business owners has been described as triggering one of the biggest transfers of corporate assets on record in Canada. This creates an environment with an abundance of opportunities to acquire SMEs with long-term operating histories, at attractive cash flow multiples. Equicapita provides investors with access to this alternative asset class via an efficient RRSP eligible structure. DISCLAIMER The information, opinions, estimates, projections and other materials contained herein are provided as of the date hereof and are subject to change without notice. Some of the information, opinions, estimates, projections and other materials contained herein have been obtained from numerous sources and Equicapita and its affiliates make every effort to ensure that the contents hereof have been compiled or derived from sources believed to be reliable and to contain information and opinions which are accurate and complete. However, neither Equicapita nor its affiliates have independently verified or make any representation or warranty, express or implied, in respect thereof, take no responsibility for any errors and omissions which maybe contained herein or accept any liability whatsoever for any loss arising from any use of or reliance on the information, opinions, estimates, projections and other materials contained herein whether relied upon by the recipient or user or any other third party (including, without limitation, any customer of the recipient or user). Information may be available to Equicapita and/or its affiliates that is not reflected herein. The information, opinions, estimates, projections and other materials contained herein are not to be construed as an offer to sell, a solicitation for or an offer to buy, any products or services referenced herein (including, without limitation, any commodities, securities or other financial instruments), nor shall such information, opinions, estimates, projections and other materials be considered as investment advice or as a recommendation to enter into any transaction. Additional information is available by contacting Equicapita or its relevant affiliate directly.

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