For Executives & Entrepreneurs: Selling Your Business

Over the last 15 years, the founders of Pine Creek have worked with over 100 individual or family owners in exploring the sale of all or a part of their business. Those experiences have delivered a full appreciation for the emotional investment that owners have in the business they have built and their desire for confidentiality of the transaction. Pine Creek completely understands the importance of maintaining continuity of the business culture and, oftentimes, the management team. Most importantly, we recognize that prompt execution may not be a motivator – finding the right partner or buyer is. Our timing is your timing and we are very interested in having you get to know us years before you are ready to transition to a new ownership structure.

In fact, one of the partners of Pine Creek is publishing a book on this very topic. “Selling Your Baby”, a follow-up to his successful book, “Buyout,” (Amacom, 2001) is scheduled for release in 2006. Its contents on topics such as preparing the company for sale, key tax strategies, family transition issues, and maximizing value at the time of sale will serve as a guide to individuals who, like you, are exploring what will unarguably be their singular most important business transaction. The knowledge that is being applied to the new book is available today at Pine Creek. We look forward to discussing your goals when convenient.

Transfer of a Family Business. Transferring full or partial ownership to committed family members who have a personal drive to maintain the historical connection to a business can help ensure its continued success. Partnering with Pine Creek will accomplish three goals as the result of a sale to family members:

• Providing the owner with funds for retirement or asset diversification.
• Preserving the culture and avoiding the operational disruption that may occur as a result of a sale to an unrelated buyer.
• Maintaining substantive ownership by family members who may not currently possess the funds to purchase it.

Selling Your Company to the Team That Helped You Build It. This approach allows an owner to sell all or a part of a business to those that have earned the trust of the owner to maintain its values and culture. A transaction of this sort, where your management team enters into a partnership with Pine Creek, accomplishes a number of goals:

• Operational momentum is maintained by minimizing disruptions and departures.
• Capital is provided to the management team which is utilized to purchase stock from the owner and properly fund the business.
• Pine Creek team members serve as a patient, unobtrusive resource to the management team in structuring a transaction with the owner and as a source of operational guidance if needed after closing.
• Provide the owner with funds for retirement or asset diversification.

An "Outright" Sale. Your primary goal in a sale transaction may not be to sell the business to existing management or family members. Instead, you may desire to sell for the highest price or to a new owner who understands the importance of the culture that you have built within the company. Perhaps there is a competitor or a synergistic buyer that would deliver important distribution or new products to your business which, when the two platforms are combined, will drive the company toward its next generation.

To assist you with realizing any of these goals, Pine Creek can partner with the buyer you have in mind or utilize our management resources. To provide leadership in situations where management is not the buyer, Pine Creek has formed an Advisory Board of senior operating executives which can be a powerful asset in completing such a transaction. One key Advisory Board member, Dan Gillis, was the highly effective CEO of one of the most successful management buyouts ever completed.

Through managers like Dan, Pine Creek can help business owners successfully complete a deal while providing a stable operating platform for the future. The advantages of this approach include:

• Owner receives a market price that provides funds for retirement or asset diversification.
• Pine Creek can partner with you to approach competitors or synergistic buyers, and provide funding to complete the deal.
• Opportunity for the selling owner to maintain an equity stake in the business if desired.
• Often, a sale of this type would include a higher percentage of cash in the price and less seller financing or structure than in others.

Recapitalization or Repurchase to Provide Shareholder Liquidity. Often it is the case that a partner in a business desires to sell all or a segment of his or her ownership to other owners who wish to maintain their ownership and increase it through a repurchase from that selling partner. In other instances, the majority of an owner's assets may be in the form of ownership in the business. That owner wishes to continue to grow the business, but has a desire to sell some percentage of ownership.

•Financial security and asset diversification from current cash proceeds in a recapitalization or repurchase.
• Control and ownership continuity through a recapitalization where the owner, family member or managers potentially maintain the right to repurchase the Pine Creek investment.