KRG Capital prides itself for creatively structuring transactions to meet the needs of the sellers, management, employees, KRG Capital and its affiliated limited partners. We maintain an open mind in evaluating transactions and devise creative solutions to meet the ultimate goals and objectives of all parties. Typically, transactions will be in one, or a variation, of the following forms:

Owner Recapitalization A recapitalization (commonly referred to as a "recap") is an ideal alternative for an entrepreneur business owner who wishes to sell a portion of his/her company for liquidity or estate planning purposes, while retaining significant equity ownership to participate in the ongoing company's upside. This structure allows the owner to achieve personal liquidity without sacrificing operating control of the company that the owner has painstakingly grown, while gaining KRG Capital as a strong financial partner to assist with issues of strategic importance. In many cases, an owner's earning potential on the rolled-over equity is as much or more than the amount received in the initial "partial sale." In addition, a recapitalization eliminates all personal guarantees tied to the company. KRG Capital will also implement an incentive program to provide management and employees with the opportunity to participate in the equity upside generated by the company's growth strategy. (Call us for a complete brochure that fully explains a recap and how it can benefit an entrepreneur.)

Management-led Buyout of a Private Company Incumbent management will partner with KRG Capital to acquire the business they are currently operating. Sellers typically receive all cash; and management will invest a meaningful portion of their net worth with the remaining capital provided by KRG Capital. KRG Capital will also implement a compensation incentive program to reward management for profitably growing the business, both internally and through acquisitions.

Management-led Buyout of a Corporate Division KRG Capital helps managers acquire divisions of parent companies. Corporations selling divisions require that a buyer have both ample funding and a track record of closing transactions quickly and efficiently. As a well funded, experienced partner with a strong track record, KRG Capital adds financial credibility to managers as they pursue their chance to acquire the division they run. Similar to the other transaction types, KRG Capital will seek to implement equity incentive plans for the management team and employees in the newly acquired company.

Outright Purchase While similar to a management buyout, KRG Capital acquires 100% ownership of the company from a departing owner. In this case, KRG Capital will seek to incentivize the management team and employees through a stock purchase plan, stock option plan, or loan to acquire equity on a pari passu basis with KRG Capital.

Family Succession Often this type of transaction involves backing certain members of family management in buying ownership from the senior generation or from outside shareholders. By working with KRG Capital in a family succession transaction, active family operators secure operating control and significant equity ownership while gaining KRG Capital as a strong financial partner in pursuing future growth opportunities. In addition, selling shareholders achieve liquidity to meet personal estate planning and net worth diversification objectives. This type of transaction also ensures that the family business stays in the family and maintains its identity within the community. KRG Capital is well aware of the importance of discretion and confidentiality in this type of transaction.

 

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