Generational Change

Wish to talk to someone with experience? Many business owners can’t decide on an optimal succession plan. The value of the business to the heirs as a going concern could be considerably more than the proceeds realised from a sale to a third party, and vice versa. The dynamics in each family are different and business succession planning needs to be tailored specifically to your needs.

Keeping the Business in the Family

Do you wish to retire but have insufficient capital outside the business in order to do so? Do you depend on the business for an income in retirement? KSA Capital Advisors is able to offer a solution in cases such as this.
Additionally, advise on strategies to avoid conflict between siblings once you have exited.

Leveraged Recapitalisation

We design a phased buyout of the equity of the founder well before retirement, often using only the assets of the business as collateral. We will design a structure where the owner funds a retirement, the children get their inheritance, and the business remains in the family.

Management Buy Outs

Wish to incentivise and retain management? We have advised numerous clients on the transfer of ownership to key staff by way of a Management Buy-Out (“MBO”).

Case Study

The ageing owner and founder of this business had 3 mature aged children, one of whom, the oldest son, had worked in the business for over 10 years. As part of an estate plan, the founder wished to leave all three children an equal inheritance, and wished to leave the business to them all. However, the oldest son was opposed to this. KSA valued the business, and by using a leveraged recapitalisation method, negotiated with all parties that the oldest son was able to buy out his father, at market value, over a period of time. The proceeds of the buyout went into trust, the proceeds of which were used by the father for estate planning purposes, to be divided between the children.

The owner of this national business had suffered a setback to his health and was evaluating his options. He didn’t wish to sell, but the business was too demanding for him to manage alone. KSA valued the business, negotiated a fair value at which each of his key state managers would buy a share in the business, and through a combination of equity, salary sacrifice, and debt, arranged the finance for the MBO. It took management just over 5 years to buy their shares. The business has almost doubled its turnover since then.