APG Partners offers a one-stop financing source for a broad range of
investment needs.
APG Partners will finance the entire transaction involving the sale or majority recapitalization of business valued between $10-$25 million. A one-stop financing source benefits all parties involved by:
- Reducing the time to close
- Increasing the likelihood of
closing
- Reducing financing risk
- Eliminating inter-creditor
negotiations
- Maximizing post-transaction cash
flow for the company
- Better aligning the interests of
management and capital
- And creating a true financial partner for management
Example:
A business founder/owner approaching retirement age wants to sell his business worth $20 million. His long-time president does not own any equity and wants the opportunity to buy the company.
APG Partners will invest all $20 million necessary to close the transaction and provide the president and his management team with meaningful equity ownership in the company.
Business owners are often interested in monetizing a minority equity interest in their company in order to 1) repurchase non-active equity holdings, 2) diversity personal assets, or 3) repurchase institutional ownership. An investment by APG Partners may provide any number of potential benefits, including:
- Offering a fair market valuation to
any seller(s)
- Enhancing the ownership of
remaining shareholders
- Replacing short term debt with more
long-term debt
- Aligning lenders and equity interests
Example:
A business is owned by two individuals, each owning 50% of the company. One owner runs the business and the second was involved with financing its foundation. The company’s enterprise value is $20 million, comprised of $5 million of term debt and $15 million of equity value. The active owner has an agreement to buyout his passive partner. The company would also like to raise $5 million for growth.
APG Partners will invest $12.5 million to support the buyout and growth financing. Ownership by the active owner/manager could be increased from 50% to 75-85%.
In those instances where a business owner is financing an acquisition, but does not have the balance sheet or credit capacity to fully finance the deal, APG Partners will typically structure an investment that is significantly less dilutive than other equity alternatives. We are also comfortable providing all the debt for a deal. Since our debt capital is typically non-amortizing for at least five years, there is more cash flow flexibility for the combined companies.
Example:
A service company is completing a $20 million acquisition of a competitor. Neither company balance sheet has significant assets or debt. Combined EBITDA is $4 million. In addition, the combined businesses expect to grow at a high rate and, as such, cash flow from operations will be significantly lower than its earnings. The buyer is looking for low amortizing debt financing to complete the acquisition.
APG Partners will invest $20 million in interest-only subordinated debt with warrants to finance the acquisition.
When a business owner is considering equity alternatives to finance their growth, APG Partners can structure an investment that is often 3-4 times less dilutive than most equity investments. In addition, as equity oriented investors, we are very comfortable assessing companies whose profitability is low relative to the capital investment or are not profitable on a trailing basis but whose profitability is imminent.
Example:
A $15 million revenue software company has developed a promising application, but is not yet profitable. The company plans to raise $5 million for working capital purposes and is projected to become increasingly profitable within a few quarters. APG Partners will invest $5 million of subordinated debt with warrants on a significantly less dilutive basis than equity alternatives.
