G-XRJHMYWFYK

How Could a Minority Equity Investment Help Your Business?

4

Mike Lonergan of Georgia Oak Partners Discusses Why Minority Equity Makes Sense Right Now

We have spoken with a number of business owners recently who have expressed an interest in Minority Equity. We think this makes all the sense in the world.

Why?

Many owners do not think now is the right environment to consider a sale, or simply may be years away from an exit. However, there are a few good reasons to consider a Minority Equity investment:

  1. Invest in your growth by bolstering your corporate team, expanding new markets, or executing an acquisition
  2. Take chips off the table to provide personal diversification
  3. Gain a partner with alignment of goals and skills to bring to the table
1
2
3

It is interesting to see large, sophisticated companies pursuing this strategy. Recently, U.S. Foods, the 2nd largest food distributor in the U.S. with over $25bn in revenue, closed on a sizable Preferred Equity investment from KKR. U.S. Foods did this to “further fortify [their] balance sheet during the current difficult environment”. Could U.S. Foods have brought on more debt, presumably at a cheaper cost? Probably. But their calculus was that it would be prudent to not strain their cash flows and covenants and that equity would provide more flexibility and a value-additive, long-term partner in KKR.

While U.S. Foods is quite a bit larger than Georgia Oak’s target partner size, we think the rationale for Minority Equity to be even more pronounced in the middle market. While banks do have vastly better balance sheets than they did in the Great Recession, we have already seen a general tightening of credit appetite levels. Personal guarantees will be of increasing importance, which can further expose an owner’s personal financial stability.

Putting our cards on the table - why is Georgia Oak interested in doing this? Well first of all, it’s very common for great companies to not be for sale, so this allows us an opportunity to lock arms with some of Georgia’s best. In addition, we see this as a way of de-risking our investment - we benefit from the continuity of an owner or management team that wants to stay in place with a high degree of alignment.

Human Resources on the Front Lines of Business Continuity

Do you want to brainstorm how you could benefit from a Minority Equity investment?

Do you have any additional questions on how an equity investment could help you grow?

If so, please feel free to set up a confidential conversation by sending Mike an email at Mike@GAOak.com.

HERE ARE SOME RELATED ARTICLES YOU MAY ENJOY

Putting People First

By Kelly Levine | November 18, 2021

By Kelly Levine, Director of Marketing, Georgia Oak Partners I spent most of my career working in the advertising business. If I were to take a guess at how many brands I have worked on over the years, it would definitely be over one hundred. They have ranged from local restaurants, to companies like Home […]

GO Grow: Manufacturing Spotlight

By Camille Cantrell | September 14, 2021

The latest episode in Georgia Oak Partners’ “GO Grow” video series features Managing Partner Mike Lonergan’s conversation with Georgia Association of Manufacturers President Roy Bowen. Created by Georgia’s textile industry, the Georgia Association of Manufacturers (GAM) has steadily diversified its membership and broadened its reach and the scope of issues it addresses. While its mission […]

Consumer Marketing Spotlight

By Camille Cantrell | September 8, 2021

The latest episode in Georgia Oak Partners’ “GO Grow” video series features Managing Partner Mike Lonergan’s conversation with Your Pie Chief Marketing Officer and Marketing Expert Lisa Dimson. With more than 20 years of marketing experience on behalf of consumer brands, Lisa discusses digital marketing trends accelerated by the pandemic and how to leverage those […]

Building the People Who Build Your Products

By Camille Cantrell | August 5, 2021

By: Dean Ditmar, Operating Partner I started my eight-year tenure at General Electric (GE) Plastics in 1997 as a Regional Sales Manager. Just two years prior, GE had introduced Six Sigma, the Motorola-inspired methodology for eliminating 99.99966% of defects in the manufacturing process. Although this process focuses on defects in manufacturing, it also opened my […]

GO Grow: Franchising Spotlight

By Camille Cantrell | July 28, 2021

The second episode in Georgia Oak Partners’ “GO Grow” video series features Managing Partner Mike Lonergan’s conversation with Operating Partner and Franchising Expert David Barr. David has been part of the Georgia Oak family for nearly ten years and sits on the board of two of Georgia Oak’s partner companies, Your Pie and Farm Burger. […]

Staffing Industry Insights

By Camille Cantrell | June 30, 2021

By Kevin P. LeCompte Before I entered the staffing world 25 years ago, I served as an officer in the Army National Guard. The lessons I began learning in the Army about cultivating successful team environments, I refined during my years as an executive at Aerotek, Staffmark, and Global Employment Solutions. I became right at […]

GO Grow: Supply Chain Spotlight

By Camille Cantrell | June 21, 2021

The first episode in Georgia Oak Partners’ new “GO Grow” video series features Managing Partner Mike Lonergan’s conversation with Logistics Industry Veteran Page Siplon. Page is the CEO of TeamOne Logistics, one of our Georgia Oak partner companies. In this Spotlight on Supply Chain, we dive deep into worldwide supply chain dynamics, from ocean freight […]

Remote Work; A Permanent Part of Every Industry

By Darren Miller | March 18, 2021

Doug Fisher | March 18, 2021 As we all know, 2020 turned the economy on its head and created an unparalleled demand for remote work across nearly every industry. Now that we’ve gotten through that initial, quick-fire change, the question is: “Is remote work here to stay?” We at GeorgiaOakPartners believe the answer is yes. […]

Governor Kemp Announces Sailfish Expansion

By Darren Miller | March 18, 2021

Sailfish Boats Manufacturing Headquarters to Expand in Grady County, Create 70 Jobs Atlanta, GA – Governor Brian P. Kemp today announced that Sailfish Boats will invest more than $1 million and increase their workforce by more than 30% as they expand their manufacturing headquarters in Grady County. This investment at Sailfish Boats and in Grady […]

Georgia Oak Partners Invests in Aditi Consulting

By Darren Miller | March 16, 2021

             Feb 16, 2021 – Aditi Consulting, a leading global technology solutions provider, announced it has raised capital led by private equity firm Georgia Oak Partners. The new capital will expand Aditi’s go-to-market efforts, and continued development of its service capabilities to help customers accelerate their digital transformation journey. Michael […]