Shareholder Recapitalization

A recapitalization as a financing or liquidity alternative is often overlooked by privately-held companies. Whether a business is undercapitalized and in need of subordinated debt or equity capital, or is at a point where shareholders wish to evaluate divesting of a portion of their investment in the business, Promontory Point Capital can help achieve these goals.

Equity “recaps” tend to stabilize a Company’s balance sheet for growth and / or shareholder liquidity purposes and are usually funded through an investment from an institutional investor or private equity firm. Depending on the characteristics of the Company and the size of the funding need, the existing owners may retain either a minority or majority stake in their business. A debt recapitalization is typically a lower cost option for business owners, but is dependent on the Company’s existing level of bank debt and the financial stability of the business. In certain instances, a layer of financing between bank debt and equity capital known as subordinated debt (or mezzanine debt) may be the appropriate financing structure to achieve the desired outcome.

Our network of financing sources encompasses a wide spectrum of institutional groups seeking to make debt investments, minority equity investments, as well as majority equity investments. Depending on our client’s objectives and circumstances, PPC will identify the appropriate firms, confidentially solicit their transaction interest, and help negotiate terms amongst competing firms. We have the experience, flexibility, and contacts to execute these transactions in a matter of months and have done so for both financially challenged as well as financially secure clients.

Promontory Point Capital partners meet to discuss a shareholder recapitalization.

What our clients say

“I highly recommend to business owners and CEO’s toalways usea competent advisor such as Promontory when raising capital or engaging in M&A activity. Your team is well suited for both and will undoubtedly serve others well …”

Matt Boettner
President and CEO, ASG

“Working with PPC was a pleasure.Your firm played a key role in helping Pierce Engineers Inc. plan and navigate our internal transition plan from senior ownership to new ownership within our firm for years to come.You were both hands on in our discussions and process and presented us with many options to consider along our path to transition.”

Randy Elliott
President, Pierce Engineers, Inc.

“Through the process, PPC and Bill Penkwitz, its lead partner on the deal, provided outstanding guidance;exceptional understanding and management of the process; consistent, clear and fast-responsecommunications with all parties; and a great sensitivity to hitting transaction milestones …”

Tom Magulski
Titan, Inc

Ready to Talk?

PPC brings deep financial and strategic expertise to the table along with a fresh perspective from the outside market. Please contact us to discuss your objectives.