Initial Public Offerings are not exit vehicles for owner/managers. An IPO requires a fully staffed management team that can withstand the scrutiny of Wall Street analysts. Additionally, the cost of compliance with Sarbanes-Oxley is prohibitive for most private companies.
A sale to, or merger with, a strategic acquirer could provide the highest valuation and broadest transaction possibilities among all liquidity options.
A private equity sponsored “recap” offers financial security, equity retention, and value gains through deleveraging, accretive add-on deals, and a potential increase in the exit multiple.
ESOPs allow owners to reward employees by making tax-favored contributions for the company’s employees in the form of company ownership.