Get Liquidty Without Selling - Dividend Recapitalization..

For some Business owners, the thought of a massive liquidity event is appealing, but they are just not ready to sell their business, but most Business owners have no clue, they can still get a massive liquidity event by using a Dividend Recapitalization.

This is a strategy to walk away with significant amount of money, while still retaining 100% of your business.

Generally, we can offer shareholders a 2x - 4x Leverage on their LTM SDE in the form of a Dividend Recapitalization. 

For example: If a company has $10 Million in SDE, we can inject a $20M - $40M as a liquidity event for the shareholders, without them giving up any equity. They get that capital and still own 100% of their Business.

For some Businesses we can get as high as 4.5x - 5x Leverage on their SDE. Those are special situations. With these special situations, a company with $10 Million SDE, could get a $45M - $50M Liquidity event and retain 100% of their company.

The Great thing about this strategy; is you can get liquidity now, and then several years down the road, you can sell your business and get a 2nd massive liquidity event. This is what Private Equity Funds do on occasion. 

What is a Dividend Recapitalization? It's where shareholders use debt to pay themselves a dividend. This is best used on companies that have stable cashflow.

In laymen Terms: This is a great way to pull equity out of your business, without selling it.

As a successful Business owner, you should be handsomely rewarded with massive liquidity for your efforts.

And that liquidity can come without losing control of your company...

This strategy is what very wealthy shareholders use to pull cash out of their businesses without selling. There is a reason very wealthy keep getting richer, it's because they know how to use corporate Finance in their favor!

This strategy is even used by Billionaires. We know one very savvy Billionaire that pulled $2 Billion out of his company using this strategy...

This is also a favorite tool that Private Equity Funds use to pull cash out of their portfolio companies, before they sell them.

The dividend recap has seen explosive growth, primarily as an avenue for private equity firms to recoup some or all of the money they used to purchase their stake in a business.

This often is used as a pre - sell liquidity for the Private Equity Investors. The PE Fund will likely only own the company 3 - 5 years before they seek to sell it, or exit via IPO, with a Dividend recap, they get cashed out - or partial liquidity many years ahead of their future exit.

At other times, when a PE Fund seeks to sell a portfolio company via to a 3rd party or via IPO, if they don't offers, they like, they will keep the company and use a Dividend Recap to get liquidity. 

Dividend Recap is the perfect tool to help shareholders to diversify their NetWorth. Most Business owners NetWorth is pretty much tied to their business. There is safety in diversity, having your NetWorth tied to a diversified asset portfolio, is much safer than being tied to one asset.

With this tool of corporate Finance, you can use the funds for any purpose, make wise investments, re - invest into your business, by a new home or homes, buy a yacht for all we care, have fun enjoy your liquidty!

Overall, leveraged recapitalizations allow companies to optimize their capital structure and reward shareholders, without loss of control.

At Crown Star Mergers & Acquisitions, we are the only M&A Advisor that helps shareholders structure a Dividend recap for Business owners as liquidity events, this is a tool of corporate Finance, and you need a professional to make sure you the highest amount of liquidity as possible, we also guide shareholders to minimize taxes, & Wealth Advisory post Acquisition.