GROWTH AND DEVELOPMENT, THE LIFE OF A PRIVATE COMPANY
Growth and development are the two main reasons why a private company could look to raise capital. With the right advisor a company can, be guided to find the right financial partner. The deal needs a partner to participate in a solid well-founded deal. The deal described below combined the two businesses and both companies benefited.
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SEVEN REASONS TO RAISE CAPITAL
Seven reasons why a private company might look to raise share capital from a financial private investor. For a deal to conclude successfully and quickly the valuation must be a win, win. The right deal will raise the profile of a company. The flow on effect could be that more investors become interested. This further increases a company’s visibility. All the reasons below can apply to any company, the key is for management to have the goals in place.
Expansion:
Development:
If a company is looking to develop new products and services. It may need financing for research and development.
Acquisitions:
Can be a key driver in raising capital from a financial investor. If a company is looking to buy another company or business, it has to have the cash to do so.
Recapitalization:
corporation may be reorganizing restructure its capital structure. This could be by repaying debt to lower interest expenditures.
Expertise:
An investment firm, Private Equity, can provide essential skills and experience to a firm, which can aid in strategic decision-making and growth.
Diversification:
The corporation may be attempting to diversify its investment base by attracting investors. This will assist in diversifying the backgrounds, opinions, and networks a company has.
Exit strategy:
The company management may be seeking to exit the company. This could be via an IPO or by being acquired. The presence of a financial investor could give the presence to pursue an exit strategy..
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THE DEAL FOR DISCUSSION – CAPITAL NEEDED FOR GROWTH
Let’s start by taking a quick look at the rationale behind the deal. Of course, if it sparks an idea in your mind or you would like to have a discussion about your situation. I would be happy to point you in the right direction. There is he link at the top of the article, I would be happy to point you in the right direction.
The two companies below are Company A, the operational entity and Company B, an investment firm. Post pandemic, Company A was experiencing strong growth in its key operating businesses. Going public via an IPO was not an alternative. Going public is costly and was going to place an added strain on already stretched resources.
Thus, the search was on for an equity partner, a new shareholder one with a strong investment culture. A partner to invests in the growth of Company A. Through an extensive network the advisor to the deal was able to connect with a stakeholder. A financing partner prepared to invest in the future of a growing company.
ON TARGET TO CLOSE THE DEAL
Company A
Company A (A) is based in the Netherlands a can trace its foundation to the post WWII period. Since then, A has become a world leader. It operates in over 50 countries with over 5,500 employees based in 35 countries. The core operations are in testing, inspection and certification.
The core business is supported and strengthened by its in house operations. Covering training, consultancy, and data services. The group operates in a wide variety of market segments, ranging from drinking water, energy, to construction. As well as healthcare to food, feed & farm and medical & pharmaceuticals.
