More than $1 trillion available to invest in your fleet and you can keep control

May 1, 2015
Investors have cash. Consider selling a minority stake in your company. You can have your cake and eat it too.

Today, owners of well managed fleets have more options than ever before for liquidity, growth capital, or an outright sale of their enterprise.  According to Fortune it’s a seller’s market and investors are sitting on more than $1 trillion – the most in history! They are looking for good investments.

Selling a minority stake can be the best option in this market. That way you maintain ownership control and minimize personal financial risk.

The reasons the time is right are three-fold: An abundance of capital is available in the market, from both debt and equity sources; there are fewer high quality companies for sale; and a minority stake in a successful, growing company still generates a nice return for investors. Here’s what it takes to make it happen:

Decide to diversify your personal wealth.

Many business owners have a majority of their personal wealth tied up in their company. Selling a portion of the company enables an owner to cash in on some of your hard work and re-invest the cash in safer, diversified, more liquid, long-term investments that will be available for you and your family today and in the future.

Determine what percent you want to control.

The owner’s personal and financial goals drive how much of the company is sold. If the goal is to retain control and still be very active in the company, you would sell a minority interest based upon the amount of cash you would like to take out of the company for personal reasons. This strategy will also allow you to maintain and control the direction of the company, and sell the balance at a future date. Minority sales (selling less than 50% of a company) normally involve private equity groups that want to invest in profitable successful companies.

If your goal is to retire or totally cash out of the company, you would sell a majority of the company or potentially all of the company. This type of sale enables you to capture a majority of the value in the company, and it also relieves you of major management duties. If you are not ready to leave the helm, this option may not be for you and a minority sale would work better.

Designate funds to grow your company.

Many business owners simply need an influx of cash or specialized expertise to take the company to the next level. A private equity group can provide the cash needed to expand into new markets, purchase new technology or equipment, or hire the additional sales force needed to grow the business. This can be your way to take your business to the next level – without giving up control.

The true value of your business is determined by what investors will pay. Currently, investors are willing and eager to invest in successful companies and the inventory available to them is limited. So, they have adapted to respond to the needs of owners. A willingness to do minority ownership transactions is an example of how they have adapted. Just as you see potential in the future they see opportunity as well.

About the Author

John Sloan | Vice Chairman

John Sloan is the Vice Chairman of Allegiance Capital, a middle-market investment bank that works with business owners to help them sell or raise capital. 

John has more than three decades of C-level experience in investment banking and private equity.  He has personally executed transactions with fleet owners and understands the unique needs of the trucking industry. 

During his career, John has raised more than $1 billion in debt and equity.  He is an expert in all aspects of investment banking and has evaluated and negotiated the acquisition of more than 30 companies in: energy, construction, retail, telecom, environmental, logistics and manufacturing, with an aggregate value in excess of $7 billion.

Sponsored Recommendations

Tackling the Tech Shortage: Lessons in Recruiting Talent and Reducing Turnover

Discover innovative strategies for recruiting and retaining tech talent in the trucking industry at our April 16th webinar, where experts will share insights on competitive pay...

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

Stop Sweating Temperature Excursions

Advanced chemical indicators give you the peace of mind that comes from reliable insights into your supply chains. Compromised shipments can be identified the moment they arrive...

How Electric Vehicles Help You Prolong the Life of Your Fleet

Before adopting electric vehicles for commercial/government fleets, prioritize cost inquiries. Maintenance is essential; understand the upkeep of EV fleets. Here’s what you need...

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!