Case Study: Communications Industry – Partner Buyout

Need: Partner Buyout

EXECUTIVE SUMMARY

This company has been operating for 13 years. In that time, sweeping changes have occured in the sector of media communications. Staying current in this industry is imperative for survival. They have branched from commercial to residential and some of the owners are looking to expand even further. Funding was needed for the partner buyout and the expansion campaign.

ABOUT THE COMPANY

HQ Location: Indiana

In Business For: 16 years

Annual Revenues: $6.5M

Customer Base: Domestic, Residential & Commercial Clients

CHALLENGES

> Seeking a way to buy out the partners that wanted to exit.

Create a strategy that woud allow the company to expand by taking on a larger market share.

SOLUTION

> A solution was achieved that allowed the company to use a combination of debt and equity to accomodate all participants. 

> In other words, the company took on 3.5M in debt on a term loan and also took $4.5M in control position Equity. They reserved the option to buy the equity position back at the original amount, treating the equity as a loan while the balance was outstanding.

A combination of Debt and Equity allowed this company to move forward and provided a path to growth.

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