The Prudential Capital Group Guide to Minority Recapitalizations

10.02.17

When faced with a liquidity need that extends beyond cash-on-hand or traditional bank loans, shareholders are often told that their only option for raising capital is through an outright sale. However, for those shareholders looking to maintain control of their business as well as benefit from future growth, a minority recapitalization could be the ideal solution. 

A minority recapitalization, also known as a “minority buyout”, is accomplished when a company issues subordinated, or mezzanine, debt and/or a minority preferred equity piece that funds additional dividend or distribution to the ownership group, without giving up control of the company.

A minority recapitalization is typically financed by an institutional investor, such as an insurance company, as very few private equity funds are willing to take a minority position.

If you need liquidity to buy out inactive shareholders, carryout an ownership transition or complete an acquisition, these are just a few situations where a minority recapitalization could help you achieve that liquidity. Equipped with the Prudential Capital Group Guide to Minority Recapitalizations, you will have the information you need to determine if a minority recapitalization is the right financing solution for you and your business.

Second Bite at the Apple: Achieving Liquidity Today while Maintaining Control for Liquidity Tomorrow

We understand that many company shareholders may be unfamiliar with minority recapitalizations and the capital options available to them, so the guide starts with a review of the types of capital offered to businesses as well as the advantages and risks of each.

For example, had you heard about mezzanine debt? It is the last stop along the capital structure where owners can raise large amounts of liquidity without selling a stake in their company, and is often used to finance minority recapitalizations.

What Else is Inside Second Bite at the Apple, the Prudential Capital Group Guide to Minority Recapitalizations?

  • What is a Minority Recapitalization? 
  • Uses for a Minority Recapitalization 
  • Benefits of a Minority Recapitalization
  • Minority Recapitalization vs. Outright Sale & Other Alternatives
  • Minority Recapitalization Example 
  • Case Study: Polar Beverages, a Family that Grows Together

Whether you are preparing to do your first minority recapitalization or are simply interested in exploring your financing options, the Prudential Capital Group Guide to Minority Recapitalizations is your one-stop resource.

 


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