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Family Transfer

Leveraged Buy Out (LBO)

Management Buy Out (MBO)

Employee Stock Ownership
Plan (ESOP)

Private Equity Recapitalization

Gift or Charity 

Public Offering


Leveraged Buyout

A leveraged buyout means that your management team or third party uses leverage to buy your company. Usually, the assets of the business are collateralized in order to secure a loan to provide cash at closing. The buyer then comes up with the rest of the cash or avails themselves of outside investors.

If you can afford and would like to keep some skin in the game, a leveraged buyout that includes some capital from the current owner can help get the deal done. 

Most lenders require a minimum of 30% cash from the buyers, and in many cases, especially with management teams, that may be a tough roadblock to overcome. This is when access to additional equity partners can help seal the deal.

Another option is the use of a TIGRcub security structure that may provide more flexibility in the financial plan. This can be a very effective tool that will allow the owner to take more money off the table while allowing the buyer to use the company's existing revenue stream to fund the deal.

If this type of arrangement appeals to you, Redtail Capital will be there to provide access to private equity through relationships we have built over the years. Knowing who the players are and what kinds of companies and deals they like can help speed the transaction and increase the odds for success.