Ann Arbor, MI
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Jackson Hole, WY
The School Street Capital Group Process
Building the value of a privately owned company and the wealth of its owners requires a thorough understanding of both owners' objectives and the competitive and financial circumstances of their business. School Street Capital Group's work with clients includes:
Preliminary Meetings
We meet with owners and/or management to learn their goals and challenges, and to understand the market opportunity and competitive position of their company. At the same time, owners and management probe our experience and ability to work with them and learn how an engagement would proceed. A written engagement proposal is then presented that defines a detailed work plan designed to achieve the owners' goals, and compensation arrangements tailored to the client's objectives and circumstances.
Planning Phase
Planning is the first step towards a transaction that builds or captures value for owners. We work face-to-face with management to develop a detailed but flexible growth plan for the business or, if appropriate, refine one that is already in place. In the course of the Planning Phase, capital needed for growth is quantified and desirable investors, acquisitions, or acquirers identified. This phase builds teamwork among owners and management, establishes goals for measuring future performance, and installs a simple but dynamic planning process which management can repeat regularly. Some clients choose to make this phase the basis of a continuing relationship with School Street.
Transaction Phase
School Street assists owners and management in soliciting carefully targeted investor or acquisition prospects. An important goal is attracting more than one prospect, so that competition among investors or acquirers makes the market work to the advantage of the owners. A particularly important part of the Transaction Phase is preparing management to make effective presentations to prospective investors or acquirers and arranging such presentations to conflict as little as possible with management's primary need to run the business.
Negotiating and Structuring
Negotiating with competing investors or potential acquirers is usually intense and time-consuming. We seek to structure the most favorable terms possible for the client while coordinating all parties involved in the preparation and execution of closing: client owners and management, client due diligence team, investor, investor's due diligence team, attorneys, and accountants. In doing so, we also seek to limit the time which management itself must divert to this process from running the business. Successfully completing all of the phases of this process demands intensity and perseverance by both School Street and the client and may require six to twelve months.
Our transaction experience enables owners to determine when and how to harvest the value they have built in their businesses, under the most favorable terms possible.
We Address Important Questions
Each client is unique, and each School Street engagement is defined by the particular needs of a client. All engagements, however, deal with the following questions:
- What are the owners' objectives: personal, financial, or commercial?
- What is the market opportunity and competitive position of the business? What are its management and financial resources?
- How can the business be operated and financed so as to capture the market opportunity and achieve the owners' objectives?
- What is the business worth today? If it grows, what could it be worth in the future?
- What actions, operational and financial, must be executed to build the business profitably?
- Can acquisitions or mergers be safe and effective ways to grow? If so, with whom? On what terms? How can the owners ensure that personal and business objectives will be achieved after the transaction?
- How much capital do these actions require? Is the potential return sufficient to justify the investment and the risk?
- Where, how, and when can needed capital be obtained on the most favorable terms? How are capital or acquirers attracted? How long does it take? Who manages it?
- Should the business be sold so that owners can exit and achieve liquidity? Why? When? How? To whom? For how much? Can liquidity be created without selling the business?
We Achieve Results
Our relationships with client companies address all functional areas of the business, focusing throughout on implications for valuation and financing. We work closely with owners to:
- Define the owners' short- and long-term business and personal objectives.
- Develop detailed operational and financial growth plans for the business that achieve owners' objectives — based on thorough understanding of market opportunity, competitive position, financial resources, and management experience.
- Quantify the capital (equity and/or debt) required for growth.
- Assess the business's market value for purposes of fundraising or sale.
- Identify and assess the attractiveness of acquisitions that complement the business.
- Position the business and its management to attract capital, acquisitions or acquirers on the most favorable terms possible, by effectively communicating the client's distinct market opportunity, competitive position, and management quality.
- Guide the process of attracting capital, acquisitions, or acquirers, from solicitation through negotiation and closing.
- Continue to advise owners on operational, financial, or other issues, including when to exit and achieve liquidity.
School Street delivers experienced judgment and practical plans for profitable growth, favorable financings, and building value. Contact us at mcg@sscg.com.