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When Private Equity Knocks, Will You Be Ready to Answer?
The wealth-building strategy for the executive team and investors in a franchisor traditionally focused on setting the stage for one of three scenarios: a private sale to a strategic buyer; going public through an initial public offering, with a secondary offering to partially liquidate the group's investment; or establishing an enterprise with significant cash flow available for salaries, bonuses, dividends, and other emoluments of financial success. An attractive option now available is the private equity option, which involves a sale of all or the controlling share of the equity of the business to a financial buyer. This approach reorients financial exit strategy to harvest simultaneously the gain in enterprise value while positioning existing management and possibly investors to participate in future value accretion. This approach usually allows, or even compels, existing management to participate in the equity of the business going forward.
The sellers' objective is always to maximize selling price, tempered by the reality of creating a tenable rollover equity position should the sellers desire to continue ownership at some level. As seller management considers this prospect, the books, records, and practices of the franchisor will come under intense scrutiny as part of the diligence process. The skeletons in closets will be identified and valued, and downside risk will be weighed. Several simple steps could enhance value and reduce downside risk. These steps could also cement the image of management as truly on top of the business and capable of managing the next phase of growth.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.