The document provides an overview of private equity and how it can help unlock assets for clients. It discusses the structure of private equity firms and common fund structures. Private equity is presented as an option for clients looking to retire, transfer ownership to family or management, or raise capital for growth. The presentation examines when private equity is the right option, how to qualify clients, and what life is typically like after a private equity deal, noting it often involves non-recourse capital, relationships, advice, improved reporting and growth opportunities rather than active management control. Case studies of recapitalization and management buyout deals are also presented.
Recently, James Darnell, partner at KLH Capital, gave a presentation to the Business Brokers of Florida. The aim of the presentation was to present actionable ways to unlock shareholder liquidity.
Recently, James Darnell, partner at KLH Capital, gave a presentation to the Business Brokers of Florida. The aim of the presentation was to present actionable ways to unlock shareholder liquidity.
"Arranging a valuation is both easy and a great investment. It gives you peace of mind as well as a clear plan outlining what you should do to maximise your business now and in the long term."
With business valuation, business owners can identify and correct any gaps undermining their business value, be ready if opportunities arise, and gain confidence by knowing how saleable their business is right now.
Partner in the firm's Corporate & Securities Group, Steven Weiss, presents 'Planning for a Liquidity Event' at AM&AA 2014 Summer Conference with Roger Schoenfeld from Cross Keys Capital.
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An investment in TPCM $25,000 9% Convertible Note(s) offers:
Immediate income;
Conversion to common stock or return of your investment in two years;
Upside potential returns (on conversion) of 25% to 112.5% per year (see details toward the end of this presentation);
Likely 5 year Buyout or IPO exit strategy.
For Accredited Investors
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...Yvonne Gamble
As you develop a financing strategy for your company do not get insight on how to stand outside of the box, expand your vision and reach your financial goals.
Business asset based lending is more flexible and creative than other funding solutions. Loans, lines of credit, term loans or factoring financing can be acquired using any single business collateral that is free and clear of liens. So that means we can use and fund a loan against free and clear inventory, purchase orders, contracts, equipment, invoices or real estate. These are bridge loans with better rates and with terms of 30 days to 4 years.
Artie Berne
ArTex Funding
www.ArTexFunding.com
512-261-0024
This is an article for Leaders and Managers who aims to develop themselves toward the highst elitist standards leading people.
KF Andersen Leadership Acacemy. Switzerland.
"Arranging a valuation is both easy and a great investment. It gives you peace of mind as well as a clear plan outlining what you should do to maximise your business now and in the long term."
With business valuation, business owners can identify and correct any gaps undermining their business value, be ready if opportunities arise, and gain confidence by knowing how saleable their business is right now.
Partner in the firm's Corporate & Securities Group, Steven Weiss, presents 'Planning for a Liquidity Event' at AM&AA 2014 Summer Conference with Roger Schoenfeld from Cross Keys Capital.
“Evolve: Capturing Opportunities in Today’s Market” was the theme of Alliance of Merger & Acquisition Advisor’s (AM&AA) 2014 Conference. This presentation discusses preparing for a transaction, understanding the M&A process, choosing advisors, and more.
An investment in TPCM $25,000 9% Convertible Note(s) offers:
Immediate income;
Conversion to common stock or return of your investment in two years;
Upside potential returns (on conversion) of 25% to 112.5% per year (see details toward the end of this presentation);
Likely 5 year Buyout or IPO exit strategy.
For Accredited Investors
Atlanta Black Chamber Women's Retreat March 26, 2021 Yvonne Gamble CEO SanPet...Yvonne Gamble
As you develop a financing strategy for your company do not get insight on how to stand outside of the box, expand your vision and reach your financial goals.
Business asset based lending is more flexible and creative than other funding solutions. Loans, lines of credit, term loans or factoring financing can be acquired using any single business collateral that is free and clear of liens. So that means we can use and fund a loan against free and clear inventory, purchase orders, contracts, equipment, invoices or real estate. These are bridge loans with better rates and with terms of 30 days to 4 years.
Artie Berne
ArTex Funding
www.ArTexFunding.com
512-261-0024
This is an article for Leaders and Managers who aims to develop themselves toward the highst elitist standards leading people.
KF Andersen Leadership Acacemy. Switzerland.
Professional Advisors Alliance; PAA believes that working with firms in a true strategic partnership offers the best model for success. So we work with you on a consultative basic to help you make the right choices for your practices. If you are a CPA or Lawyer, together we can make a difference. For a free, no-obligation Firm Assessment, contact me today.
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Business is unpredictable, and the one thing we know for sure is that we will face changes and challenges.
To ensure success, you must rigorously measure the performance of your business.
We have identified five key strategic areas to help you determine if your business will be successful in the future.
They will help you get started on deriving your own solutions to the key challenges, hurdles, and problems you may face.
Over the next few pages we review five (5) key strategic elements on which all business owners–CEOs– Presidents should focus to be successful.
Stepping into a role which requires business finance knowledge? Here is a short guide offering advice, tools, and expertise that you will need to equip yourself with to be successful. Check out our Diploma in Business Finance for more.
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This presentation was uploaded with the author’s consent.
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UIIN Conference, Madrid, 27-29 May 2024
James Wilson, Orkestra and Deusto Business School
Emily Wise, Lund University
Madeline Smith, The Glasgow School of Art
Have you ever wondered how search works while visiting an e-commerce site, internal website, or searching through other types of online resources? Look no further than this informative session on the ways that taxonomies help end-users navigate the internet! Hear from taxonomists and other information professionals who have first-hand experience creating and working with taxonomies that aid in navigation, search, and discovery across a range of disciplines.
Acorn Recovery: Restore IT infra within minutesIP ServerOne
Introducing Acorn Recovery as a Service, a simple, fast, and secure managed disaster recovery (DRaaS) by IP ServerOne. A DR solution that helps restore your IT infra within minutes.
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f you offer a service on the web, odds are that someone will abuse it. Be it an API, a SaaS, a PaaS, or even a static website, someone somewhere will try to figure out a way to use it to their own needs. In this talk we'll compare measures that are effective against static attackers and how to battle a dynamic attacker who adapts to your counter-measures.
About the Speaker
===============
Diogo Sousa, Engineering Manager @ Canonical
An opinionated individual with an interest in cryptography and its intersection with secure software development.
3. BACKGROUND AND CONTACT INFORMATION
Career Background
– KLH Capital, Partner
– Recovery Holdings, CFO
– Founders IB, Associate
Mobile, AL native
BS, University of Alabama
Covenant Life Church
Married with three
daughters (4, 2 & 1)
James B. Darnell
813-222-0160
james@klhcapital.com
3
4. THE GOAL FOR TODAY IS TO UNDERSTAND…
4
1. Structure and setup of private equity firms
2. When is the right time for Private Equity
3. How to qualify a client like a private equity group
4. Life after the deal for your client
5. THE GOAL FOR TODAY IS TO UNDERSTAND…
5
1. Structure and setup of private equity firms
2. When is the right time for Private Equity
3. How to qualify a client like a private equity group
4. Life after the deal for your client
6. WHAT IS “PRIVATE EQUITY?”
Investors that make investments into private companies (not
publicly traded)
Capital for private equity is raised from high net worth
and institutional investors
Money can be used to accomplish a myriad of goals and
objectives in the context of a deal
6
7. FUND STRUCTURE IS TYPICALLY CONSISTENT…
7
Limited Partners (Investors)
(Pension funds, insurance companies, high net worth
individuals, family offices, endowments, etc.)
Private Equity Fund
(Limited Partnership)
Investment Investment Investment
8. …BUT EACH FIRM HAS TARGETED CRITERIA
8
Startup Stable/Mature
Maturity of the Company
Hands on Hands off
Operational Involvement
$0 $1bln+
Size Investments
Industries of Interest
Old economy New economy
9. FOR EXAMPLE, AT KLH WE LIKE:
9
Company
Maturity
Mature, growing businesses with a history of profitability that need
capital for growth, expansion, working capital, or buyouts
Company Size Revenue of $10.0 to $100.0 million with EBITDA of $2.0+ million
Management Desire to assume meaningful ownership stakes
Targeted Sectors
Niche manufacturing
Value added distribution
Specialty services
Geography Nationwide
10. THE GOAL FOR TODAY IS TO UNDERSTAND…
10
1. Structure and setup of private equity firms
2. When is the right time for Private Equity
3. How to qualify a client like a private equity group
4. Life after the deal for your client
11. UNDERSTANDING YOUR DEAL IS THE FIRST STEP
11
Business owner wants to retire in 5 – 10 years, wants to
maximize the value of his business over that time frame
Retirement
Business owner needs to buyout minority partner and bring
in capital to help him grow
Shareholder
Buyout
Patriarch of the family company wants to retire, but doesn’t
trust 2nd generation to run the company with all his net
worth on the line
Family
Transfer
Inactive business owner wants to sell the company to his
management team
Management
Buyout
12. GOALS & OBJECTIVES DETERMINE STRATEGY
12
Who owns the company?
Who runs the company?
Who wants to sell and who wants to
stick around?
Why is the company for sale?
•Where is the company heading?
Goals &
Objectives
Key Questions To Answer
13. FUNDAMENTAL M&A TRANSACTION OPTIONS
13
Least
Most
MostControl
Liquidity
Recapitalization
Sell large % of equity
Status Quo
No Exit Plan
Outright Sale
Sell 100% of equity
Private Equity
Options
14. RECAPITALIZATION AS A PHASED EXIT PLAN
Sponsor acquires majority position in the company to provide
diversification of shareholder(s) wealth
Owner retain ownership stake and continue growing the company with a
“2nd bite of the apple” in mind
Existing management team/owner retains operational control day-to-day
14
Recapitalization
Mgmt
Minority
Mgmt
Owns
Majority
Big Idea: Client sells a portion of their ownership now at FMV, brings on partner to help
grow the business and setup for 2nd “bite at the apple” in 4 – 7 years
Private
Equity
Group
15. CASE STUDY – MIDSTATE MACHINE & FAB.
15
Post-Investment Summary
Management partnered with KLH Capital to
support their growth strategy and pursue select
acquisitions
Post transaction, the Company brought on a new
CFO and controller to implement a new IT
infrastructure and to improve financial tracking
We are evaluating a number of add-on
acquisitions to help bring on new service
offerings
Mid-State expects to grow EBITDA by more
than 20% in FY 2015
Company Description
Transaction Summary
• The owner was seeking a liquidity event to plan
for retirement and desired to bring on a growth-
oriented financial partner
• The Company was able to give equity to an
industry veteran who became President
Provider of outsourced fabrication, maintenance, and field services to the
mining, chemical, power, and general manufacturing industries
16. OUTRIGHT SALE TO FAMILY OR MANAGEMENT
Sponsor backs current management team or other family members to buy-
out current majority shareholders
– Family members are often times members of the management team
Provides ability for next generation to build wealth via “sweat equity”
16
Exiting
Seller
Owns
Majority
Mgmt/
Family
Sale
Big Idea: Client sells the company to the Management team or someone else in their
family to facilitate a liquidity event at a fair market value
Private
Equity
Group
17. CASE STUDY MANAGEMENT BUYOUT
17
KLH Capital partnered with Management to
develop the business organically and through
acquisitions
KLH Capital helped to secure a robust line of
credit to ensure adequate working capital
availability for implementing Management’s
growth initiatives
Post transaction, the Company expanded its
warehouse and office space and brought on new
sales professionals including a Vice President of
Sales and Marketing
• The President of the business was seeking a
liquidity event in order to retire
• KLH Capital facilitated a transaction that
allowed Management to gain a large equity stake
in the Company
A national full-line distributor of petroleum handling equipment for
petroleum marketers, wholesalers, and technicians
Post-Investment Summary
Company Description
Transaction Summary
18. THE GOAL FOR TODAY IS TO UNDERSTAND…
18
1. Structure and setup of private equity firms
2. When is the right time for Private Equity
3. How to qualify a client like a private equity group
4. Life after the deal for your client
19. HOW TO QUALIFY A CLIENT LIKE A PEG
19
Key
Value
Drivers
Customers
Industry &
End
Markets
Suppliers
Competitio
n
Mgt &
Financials
20. QUALIFY A CLIENT: CUSTOMERS
20
How does the company make money?
Who are its customers?
Is there customer concentration?
What does the sales force look like?
How difficult is it for customers to
leave?
Customers
Key Questions To Answer
21. QUALIFY A CLIENT: INDUSTRY & END MARKETS
21
How discretionary are the purchases
to the customer?
How big is the market?
Is it growing or shrinking?
How cyclical is the business?
How regulated is the industry?
Industry &
End
Markets
Key Questions To Answer
22. QUALIFY A CLIENT: SUPPLIERS
22
Who are its suppliers?
Is there any supplier concentration?
How easy would it be to switch
suppliers?
Can the suppliers sell directly to the
end user?
Suppliers
Key Questions To Answer
23. QUALIFY A CLIENT: COMPETITION
23
How special are its products/services?
Are there any reasonable alternatives?
Why do customers buy from them?
How easy is it for new competitors to
spring up?
Competition
Key Questions To Answer
24. QUALIFY A CLIENT: MGT & FINANCIALS
24
Who are the key people in the
organization?
– Responsibilities
– Backgrounds
– Goals & Objectives
How big is the company and how
organized are the numbers?
What type of accounting
software/MIS does it use?
Mgt &
Financials
Key Questions To Answer
25. THE GOAL FOR TODAY IS TO UNDERSTAND…
25
1. Structure and setup of private equity firms
2. When is the right time for Private Equity
3. How to qualify a client like a private equity group
4. Life after the deal for your client
27. BUT ACTUAL REALITY IS MUCH DIFFERENT
27
Non-recourse
Capital
Relationships
Experienced
Advice
Improved
Reporting
Growth
Energy/
Excitement
28. TYPICAL CONTRACTS & KEY TERMS
• Price and Consideration: How much value is being delivered, the forms of consideration
(cash/stock/note/earnout), and the terms of each
• Reps/Warranties: Outlines indemnification from seller for various forms of liabilities
• Working Capital: Buyer will typically expect A/R, Inventory & A/P to be transferred
• Non Compete: Sellers will not be able to start another similar business within ~5 years
Purchase Agreement
• Post Closing Roles: Outlines the seller’s role and responsibilities be going forward
• Compensation/Benefits: Documents all compensation seller will receive going forward,
including salary, bonuses, and benefits
Employment Agreement
• Corporate Governance: Who controls the company and can compel it to do something
• Transfers/Repurchases: Governs when/where/how sales of ownership can occur
Shareholders Agreement
28
29. Q&A
James B. Darnell
601 Bayshore Blvd.
Suite 850
Tampa, FL 33606
813-222-0160
james@klhcapital.com
29
www.klhcapital.com