Executive-in-Residence Engagements

Grand Avenue Capital Partners has been engaged by senior executives who have considerable experience in a particular industry. These individuals wish to acquire their own company, capitalizing on the depth of experience they have in their particular niche.

Grand Avenue bankers provide the following services on an exclusive engagement basis to the experienced executive who seeks an acquisition related to their experience:

  • Assist these executives in executing the acquisition plan for a firm in their niche industry. The business plan must address the following:
    • Is the business plan defensible and achievable? Often profit performance is planned to improve when a sales transaction occurs. The acquired entity will have additional capital constraints, debt, concerned vendors, uneasy employees who will have cost constraints placed on them by the new owners, etc. The management plan, post-acquisition must be realistic.
    • Will the new owners achieve the rewards for the new risks they are taking? Often personal guarantees will be required of the new management owners. Will this be acceptable?
    • Will there be adequate capital to grow the business, given that the Company will be leveraged to pay off the old owners?
    • Do the new management owners have an exit plan of their own? Can this Company in the hands of a newly energized executive be grown to be an IPO candidate, or at least sold at higher valuation to strategic interests? If private equity assists the management to buy the Company, these new financial partners will be very interested in an exit….sooner than later.
  • The executive will solicit a small number of companies or operating divisions within their niche industries whose shareholders may wish to sell . Typically, Grand Avenue’s clients seek companies with a minimum EBITDA of $5.0 million. Because of the executives’ knowledge of their industry, they are aware on a personal basis of companies meeting their criteria and owners wishing to sell their interests.
  • Grand Avenue bankers and the executive team work together in assessing the prospects developed by the executives and evaluate on a confidential basis the prospects of the business, operations, position in the industry, market potential growth, and develop a business plan, post-acquisition that will be used to attract potential investors / lenders. Periodic financial statements from the target company shall be forwarded to Grand Avenue bankers as they are prepared during the course of this engagement.
  • Grand Avenue will assist in the negotiations and develop acceptable term sheets on behalf of the executive team in their acquisition of the identified business. Grand Avenue will review proposals in connection with any potential or actual Transaction and assist in all aspects of the negotiation process including establishment of structure, price and terms. A period of exclusivity is negotiated. Timelines are proposed.
  • Grand Avenue bankers prepare compelling documentation for lender/equity participants. Strategic investors may be part of the prospective participant list.
  • Financial participants are contacted simultaneously, and Grand Avenue assists the executives in the determination of the preferred participant. Definitive transaction documentation is prepared by legal counsel and reviewed by Grand Avenue and management counsel. Equity incentives for executive management are negotiated. Management consulting contracts are sought for key employees.
  • The executive-in-residence acquisition transaction is closed.