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https://www.prudentialprivatecapital.com/posts/7-uses-for-a-minority-recapitalization
https://www.pricoaprivatecapital.com/posts/7-uses-for-a-minority-recapitalization

7 Uses for a Minority Recapitalisation

September 1, 2018
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In some ways, a minority recapitalisation gives businesses the best of both worlds; providing companies with capital that can be used to meet their growth objectives, while still enabling active shareholders to stay in control.
Infographic showing 7 uses of a minority recap, including recapitalizations, share buybacks, dividends, management buyouts, acquisitions, growth capital and refinancing

The above infographic illustrates the various uses of funds raised from a minority recapitalisation. A minority recapitalisation, also known as a “minority buyout”, is an alternative means of raising capital to generate liquidity. In a minority recapitalisation, leverage in the form of senior debt, mezzanine financing and/or preferred equity can be provided to an existing, positive cash-flow generating business.

Financing from a minority recapitalisation can be used for a variety of capital needs, while allowing the active shareholders to retain majority control of the business, as opposed to a majority recapitalisation or outright sale of the business. The company’s future cash flow is then used to repay indebtedness in subsequent years.

This document does not take into account individual circumstances, objectives or needs, nor is it intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services.  This document does not constitute investment advice and should not be used solely as the basis for any investment decision.
This article represents the views, opinions and recommendations of the author(s) regarding the economic conditions, asset classes, securities, issuers or financial instruments referenced herein. Distribution of this information to any person other than the person to whom it was originally delivered is unauthorised, and any reproduction of these materials, in whole or in part, or the divulgence of any of the contents hereof, without prior consent of Pricoa Private Capital is prohibited. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. Pricoa Private Capital has no obligation to update any or all of such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services and should not be used as the basis for any investment decision. Past performance is no guarantee or reliable indicator of future results. No liability whatsoever is accepted for any loss (whether direct, indirect, or consequential) that may arise from any use of the information contained in or derived from this report. Pricoa Private Capital and its affiliates may make investment decisions that are inconsistent with the recommendations or views expressed herein, including for proprietary accounts of Pricoa Private Capital or its affiliates.
The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients or prospects. No determination has been made regarding the suitability of any securities, financial instruments or strategies for particular clients or prospects. For any securities or financial instruments mentioned herein, the recipient(s) of this report must make its own independent decisions.
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