Sun Equity Solutions

Sun Equity Solutions provides middle market business owners with uniquely tailored financial and strategic alternatives. Our deep experience in this market segment and strong relationships with both equity groups and strategic acquirers makes us well prepared to provide owners with direct and accurate feedback as they explore their future options. We have no interest in convincing an owner to sell a business. Rather, our goal is first to appraise the situation and help define the potential options available to the business and its owners. We will move forward with a business opportunity only if it is clear that we can add the value required for a given transaction.

Over the last few challenging years we have spoken to hundreds of business owners. The most common need elicited from this group was the desire to do "something". The definition of “something” varies with the situation and could include an outright sale, a strategic consolidation/merger, access to growth capital, a recapitalization to take money off the table, etc.

Next on the wish list was a hope to achieve one of these options without formally putting the company on the block - or paying extravagant front-loaded fees. It is this nexus that we focus on: defining the availability of financial options and validating this analysis through targeted introductions to the private equity community.

These opportunities generally take one of three basic forms:

Recapitalizations: Situation: An owner wants to diversify financially and take a significant chunk of value "off the table" (i.e. for estate planning, children, etc.); the business is solid and generates EBITDA over $3 Million; would keep an equity ownership position and continue running the business; the firm could use access to non-recourse capital to pursue growth opportunities or follow-on acquisitions. This is a classic "re-cap" scenario that can be accomplished in a variety of structure that deliver significant cash to the owner without immediately taking him/her out of business operations.
Re-caps can also solve issues relating to generational ownership transfers. Also, a classic benefit is the second bite at the apple upon the next exit (i.e. selling a smaller stake in a much larger company).
Growth Capital: Although a growing business is a good thing, it often kills cash flow and requires significant access to new working capital. A growth capital investment provides access to non-recourse capital and permits management to focus on the business (not the financing). A solid financial partner should also bring domain expertise and contacts and be able to assist in planning a solid exit or liquidity strategy.
Pure Divestment: An owner wishes simply to sell his ownership interest for cash and transition into retirement. Either existing management will be elevated to run the company or an acquirer will bring in additional senior management. In light of current market conditions and favorable interest rates, the time has never been better to explore the pure divestment option. A critical factor is whether (or not) the company can continue to thrive without the current owner. If not there may be a need for a mid- term transition to train replacement management.

Certain Turn Around Situations: In situations where companies (or divisions of companies) have good brands, solid customer bases or other strategic assets, it should be possible to attract an institutional sponsor irrespective of profitability (within reason). In these instances we would look to introduce an equity group with an existing platform company that could leverage cost synergies, new markets or other assets that could better capitalize on existing sales volume and/or gross profit.

The first part of our process is to discuss your business and unique situation in detail and to provide a direct and accurate assessment of your potential options and alternatives. This feedback may or may not fit with your current objectives. However in any case our input will serve as a benchmark to evaluate alternative options or future buyout offers.

For further information please call or email SES with your question or comment.