DUE DILIGENCE AND CLOSE

The pre-closing period sets the tone for a strong, collaborative relationship going-forward. Thus, from the very beginning of our investment process, we take the time to learn about the business with a thorough evaluation and analysis of each investment opportunity. We aim to develop mutually beneficial relationships with prospective sellers as well as their companies' employees, management, and customers and limit disruptions to the business’ day-to-day affairs before, during, and after the transaction.

Crosse+Partners employs simple and strait-forward capital structures. This simplicity greatly increases the likelihood of completing the transaction and condenses the potential timeline. The lower debt levels, combined with our dedicated equity capital, provide us more flexibility to support and finance the growth requirements of our portfolio companies.

Coming from entrepreneurial families ourselves, we are especially sensitive to the unique set of issues presented by privately-held, family-owned companies and take extraordinary care to work with families. Some issues or special considerations include:

• Confidentiality;
• Flexible deal structures taking into consideration estate planning and tax issues;
• Dependence on shareholders and/or concentration of decision-making;
• Shareholders’ role “the day after”.  We encourage sellers to stay involved on a day-to-day or advisory level with the business after the transaction;
• Family members who may want to remain with the company;
• Liquidity/value versus income;
• Timely transaction and smooth transition;
• Employee welfare. We realize that great companies are built by great people, and we are committed to the welfare of the employees and managers who have helped you build your company; and
• Continuation of the business.

TRANSACTION TYPES

Crosse+Partners recognizes the unique objectives of privately-held, family-owned companies as well as strategic sellers, management teams and entrepreneurs and is in a position to offer creative structures to meet each of their needs.  Approaches most appropriate for a family-owned business can include:

Management Buyout of a Family-Owned Company – Crosse+Partners will partner with existing management to lead an acquisition of a business or buyout existing shareholder positions.  We facilitate transactions for business owners who are already retired, want to retire upon closing, or want to transition to retirement over a period of years.  We can provide owners with complete or partial liquidity while ensuring that current management and employees will continue to run the business.

Generational Transitions – Crosse+Partners will partner with family members to purchase ownership positions held by other active or inactive family members or outside shareholders.  Our family succession transactions provide liquidity for departing shareholders and ensure continuity in operational control for family members remaining in managerial positions.
 
Family Recapitalizations – We understand that for most successful business owners, the business is their most substantial asset and the vast majority of their personal net worth.  This concentration of wealth in one asset has its risks in an unpredictable business climate, but is also characterized by limited access to liquidity and having personal assets committed to support the financing needs of the business.  We can structure a transaction that will provide the owners liquidity while retaining a significant ownership (though less than controlling interest) and day-to-day operational involvement.

Other transaction investments include:

Acquisition of Corporate Divisions/Subsidiaries – We will invest with management teams to acquire “non-strategic” or “non-core” divisions or subsidiaries of larger corporations.

Growth Equity Financings – Crosse+Partners will consider equity investments in companies seeking capital to finance internal growth or acquisitions.

Industry Consolidations – We will partner with experienced management teams to create leading companies in fragmented industries.