How can a company benefit from leveraged recapitalization?
Leveraged recapitalization allows owners to take some money off the table without selling the business in its entirety or losing an interest in the business to a private equity firm. In many scenarios, private equity is a good avenue for obtaining liquidity. However, owners will end up with just a fraction, or possibly none, of their company, which will be controlled by outsiders. Leveraged recapitalization is a way for a business owner to realize liquidity while still retaining 100 percent control of the business. Also, the financing process is quick: typically six to eight weeks. Finally, this type of financing can be done discreetly and with confidentiality, which means that day-to-day operations will not be impacted and morale will not be affected. In what ways does leveraged recapitalization differ from private equity financing? Typically, if a company were going to explore an outright sale to a private equity firm or a strategic buyer, it would hire an investment banker who would
