Private Equity - Grow? Cash Out? Or Both?

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PRIVATE EQUITY WHO BENEFITS?

THE SHAREHOLDERS • De-risk and cash out by selling some or all of your shares through a capital event • Remain involved in a capacity that suits you and your lifestyle Shareholders can de-risk a percentage of their stake now and realise greater value in the future through a further sale of an enlarged entity; ultimately achieving a value that exceeds expectations. A Private Equity (PE) firm will take into consideration future growth prospects which will often result in higher multiples being paid. Bringing in a PE firm can allow the owner to change their level of involvement by promoting existing staff or bringing in experienced management to help reduce the workload. Shareholders are often at different stages in their lives and may not yet be ready to sell, especially if equity has been gifted to family members. A PE deal can facilitate a full or partial disposal of your shares whilst maintaining an equity stake for fellow shareholders.

THE EMPLOYEES

• Engage and motivate employees with an equity stake • Private equity can facilitate an investment-backed MBO A PE deal can help to facilitate a Management Buyout and support a change in ownership. PE firms will often look in the first instance to the existing management team and provide the necessary funding so that they can take a shareholding in the company as an incentive to drive future growth. The aim of a PE firm is to generate substantial returns on its acquisition, and to meet these objectives, the firm will often incentivise key management to give them a sense of ownership; motivating them to ensure future objectives are aligned.