"Westham Capital's unique strength is the longstanding and quality relationships that it maintains throughout the private equity industry."

Allen Rogers
Ewing Capital

Capital Primer

Theme

"Take some chips off the table, but you don't have to retire if you don't want to."

Overview

When the owner of a privately-held company wants a significant liquidity event (i.e., significant cash harvest) and intends to cede a majority interest in the business.

Definitions

  • Buyout: The purchase of a controlling interest in one company by another company or investment group, in order to take over its assets and/or operations.
  • Management Buyout (MBO): When the active managers and/or executives of a company (often by teaming up with a financial partner) purchase controlling interest in that company from the existing shareholders/owners.
  • Leveraged Recapitalization (Recap): When private equity investors buy 100% of a company and pay the owners a portion in cash and a portion in ownership of the newly purchased entity.

Business Lifecycle Stage


Typically, only established, positively cash flowing companies are purchased through a buyout, MBO or recap. However, unprofitable companies can be purchased when a strategic purchaser or a financial investor (with an established portfolio company) utilizes one of the above transaction structures (i.e., as an add-on acquisition).

When Appropriate:

  • When the owner wishes to sell the entire business and retire.
  • When an active management team wishes to buy the business from an inactive, or retiring, owner.
  • When the owner wishes to sell a majority of the business for cash but keep an ongoing ownership stake in the company. In most instances the owner can decide whether to remain active in the business.

How Westham Capital Partners Can Help

Westham Capital Partners, based in Richmond, VA, serves as a co-investor and strategic partner to private investment groups (Partner Funds) who desire concentrated investment opportunity development throughout most of the United States and Canada. These funds retain Westham to provide them with a dedicated, more efficient business development effort targeted towards intermediaries, business brokers, attorneys, accountants and other persons of influence. Westham and its Partner Funds share an interest in buyout, MBO, recap, growth capital, subordinated debt, senior debt and distressed investment opportunities.

Next Step

For additional information about our interests in this and other investment areas—or to discuss your capital needs—please Contact WCP or call 804.282.0785. We welcome you to invite your counsel or other advisors to participate as well.

Buyouts, MBOs & Leveraged Recapitalizations Partnership