Replacement Capital

Shareholders in private companies eventually reach a point in their investment in the business where they consider the option of divesting their equity. In these circumstances, Replacement Capital can provide the means for relevant investors to exit and new investors that can bring renewed financial and intellectual capital to enter.

Our Tactics

At State Equity, our approach to Replacement Capital is to initially determine the precise reason for the need to introduce new capital to the business and establish a profile of the type of replacement investor best suited to the future needs of the company.

We subsequently negotiate acceptable terms and conditions on behalf of the remaining and incoming investors to ensure that the remaining parties maintain the desired amount of ownership whilst providing the incoming investors with an appropriate return and a mechanism for an agreed exit framework.

Client Benefits

Our tactics for Replacement Capital enables exiting and incoming shareholders to achieve a fair and mutually attractive transaction structure. As part of this process, we also review the existing debt gearing of the business in order to provide the remaining investors with the optimum balance between the payout of the exiting investor and the cost of the incoming investor.

 

View our guide to
Replacement Capital