Building Products Entrepreneurs
Given our singular focus on the building products industry, we have an unmatched understanding of the transaction needs of building products manufacturers and distributors. We have learned that there is a distinct capital life cycle through which companies move over time. Our services are designed to address the capital needs of building products companies at each of these stages.Early Growth Stage – Companies that have achieved profitability and a measure of initial success often find that they have outgrown their initial investors and lenders. We are able to help these companies refinance their current capital arrangements and secure capital from lenders and equity providers that will help them propel their company to the next stage of success.
Later Growth Stage – Entrepreneurs whose companies have entered the later stages of growth often learn that their success brings with it increased capital challenges. We are able to help meet the unique needs of mature, growing companies. These include securing more significant amounts of debt, equity and mezzanine capital from capital providers that will serve as true partners to our clients. Other companies retain us to undertake acquisition searches for them. These searches draw upon our extensive network of contacts in the industry and our turnkey methodologies for ensuring that the search does not tax our clients’ management teams. Such searches are an excellent way for companies to generate the kind of proprietary deal flow that makes the goal of growing through acquisitions a profitable reality.
Partial Liquidity – Many entrepreneurs find it preferable to phase in an ownership change over time by taking partial liquidity in a sale of a portion of their company. The decision to sell a company is seldom an easy one. For most entrepreneurs, there is an emotional connection to the company they’ve built and grown over time that is deeply important to them. Selling a minority stake in a company is a way to achieve liquidity that is needed for diversification, estate planning and other needs. Our professionals are in touch with numerous capital providers that prefer to make such minority investments, since the founding entrepreneur leaves a meaningful portion of their net worth in the company.
Real Estate Sale Leaseback – Another way to take partial liquidity in a company without selling a controlling ownership in it is to take advantage of a sale-leaseback of the company’s real estate. These transactions can be achieved relatively quickly and can result in a source of liquidity that places fewer restrictions on the company than other forms of capital.
Full Liquidity – The final stage in building the value of a company typically consummates in the sale of the business. Business owners that wish to achieve liquidity through the sale of their company find that Building Industry Advisors utilizes a thorough, consistent and highly detailed approach to the execution of successful transactions.
Management Buyouts – A management buyout is a particular type of liquidity event, in which a capital provider backs the non-owning or minority ownership members of the management team in acquiring the company from the minority owners. Financial investors favor these transactions because their interests are closely aligned with those of the experienced management team, who remain with the company following the transaction. Entrepreneurs benefit from these transactions because they are able to achieve a meaningful liquidity event, while leaving the company in the hands of the executive team that helped build and grow the company.
Debt Restructuring – When a company secures debt capital from a lender, it is always the mutual assumption on both sides that the debt will be fully repaid with interest. However, in times when the market softens, a company often finds itself burdened by a larger debt than it can reasonably repay from cash flow in the foreseeable future. In such cases, it is often mutually agreeable for the business to refinance and restructure the existing debt with a new lender. This usually involves a reduction in the total amount of principal owed by the company. While this is never the intended outcome, restructuring usually leads to a better economic result for both the borrower and the lender than a foreclosure or similar proceeding.
Special Projects – Given the complicated financial decisions that face entrepreneurs in the building products industry, we offer a variety of services designed to address special situations that arise. These include financial advisory services, assisting companies in making overall strategic decisions that will be heavily driven by financial and market analysis. Our professionals can assist companies in completing valuations for partnership buyouts, estate planning or other events. Companies searching for strategic joint venture partners to enter new geographies or product areas call on Building Industry Advisors to locate an ideal strategic partner for them. Other companies take advantage of our ability to conduct highly specialized industry research, to help in making important strategic decisions.
Other Opportunities for Entrepreneurs – After selling their company, entrepreneurs often find it challenging to adjust to the notion of leaving the building products industry. Many choose not to do so. For these executives, we are able to provide introductions to opportunities to co-invest in transactions or assume a chairman-level role in a company that would benefit from their many years of experience. We frequently encounter situations in which the help of a qualified executive is needed or in which an opportunity for an industry entrepreneur to co-invest exists.