Does Zenith fund 100% buyouts?
Yes, we will complete the buyout of the majority of the assets and up to 100% of the stock of a closely-held business depending upon the needs and desires of the selling shareholder(s).
Does Zenith require selling shareholders to
help finance their buyouts?
Sometimes yes and sometimes no. While we are comfortable with all-cash deals, some instances require that a seller provide some financing. For example, when the seller is a key-manager or employee, we often ask for the selling shareholder to take back a modest promissory note in order to ensure that he or she continues to have a vested interest in the company's future.
Does Zenith recruit new management or take on management responsibilities?
We have significant experience recruiting new general managers or new presidents for companies. In addition, the principles of Zenith will generally be somewhat involved with setting strategy and overseeing the ongoing corporate governance of our portfolio companies. However, the principles of Zenith will typically not be involved with the day-to-day management of an acquired company. The exception is for unforeseen events, in which case the principles of Zenith will be available to step in and lead the day-to-day management.
What changes will Zenith implement at our company?
With new ownership, change is inevitable. However, we typically acquire companies based upon their historical success and seek to minimize major changes, especially initially. Over time, we work with management teams to profitably grow and expand the business. Additionally, we provide support to management in the acquisition and financing of follow-on acquisitions.
What does the buyout process entail?
a. |
Initial introduction to the company through a phone conversation or an informational memorandum |
b. |
We analyze recent and historical financial information regarding the company and conduct limited further discussions with the seller and/or management |
c. |
We provide a “Term Sheet” with a value or range of values for the business |
d. |
Principals from Zenith visit the company |
e. |
We negotiate a "Letter of Intent" with the seller/owner and/or intermediary |
f. |
We perform our due diligence, negotiate a definitive purchase agreement |
g. |
Documentation and closing |
How long does the process take?
We are responsive buyers and move quickly to close our transactions. After a preliminary analysis of the opportunity and with some basic financial information, we can give you an indication of interest and value within a short period of time, for example, within a few days. When we are interested in a company, we will visit facilities and owners or managers as soon as practical. Assuming further interest, we typically are prepared to issue a letter of intent (“LOI”) shortly thereafter. Closing can occur 60 - 90 days after signing of the LOI and we will work diligently to close within an expedited timeframe. The responsiveness of the seller(s), third party lenders, and their representative’s responsiveness create the greatest variability in the time required to close.
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