Retained Seller Engagements


  • CO150: Leading Processor & Distributor of Value-added Fresh-cut Produce - $8.33MM EBITDA


  • CO153: High Margin Sporting Equipment Company seeking growth capital


  • CO154: Manufacturer and Distributor of Fluorescent and Incandescent Lighting Fixtures


  • CO156: Leading Manufacturer of Specialty Chemical Products


  • CO157: Waste Management Provider - $2.4MM EBITDA


    In the next 2.5 years:

    - Your business will decline in value by almost 9%.
    - Just to breakeven, you will have to grow the value by almost 12%.
    - If its distributions are taxed as dividends, after-tax proceeds will decline by 33%

    The tax rates implemented under the Bush Administration are due to expire at the end of 2010 and new taxes have been both proposed and enacted. The implications on rates are significant:

     
    Current
    2011
    2013

    Capital Gains 

    15.0%
    20.0%
    23.8%

    Dividends 

    15.0%
    39.6%
    43.4%


    C Corporations that pay out dividends will see the most significant impact. However, S Corps are not immune, particularly if the owner is thinking about selling a portion of the business to children or employees. The sale will be deemed a dividend for tax purposes (not capital gains) unless it meets certain criteria. Please consult a tax professional to determine the impact of these changes on your situation.

    What Can You Do About It?

    There are a number of alternatives open to privately held businesses.

    • Sale - If you are thinking about getting out in the next 3 or 4 years anyway, you may want to consider selling now to ensure favorable treatment. Many buyers, particularly financial buyers, want to retain your services for that length of time anyway, so selling does not have to equal walking away.

    • Recapitalization - Don't want to sell but interested in sheltering your hard earned value from increased taxes? Pay yourself that dividend now before rates go up. A recapitalization can allow you to take a significant amount of money off the table now. It can also be a valuable estate planning tool for transferring the business to children or employees.
    • Transfer to Children or Employees - If you think this is the appropriate exit plan for you, now is a good time to explore at least a partial transfer.

    • Buy-out Minority Shareholders - Do you have other shareholders that are not active in the business? Now may be a good time to consider buying them out. They will benefit from the advantageous capital gains treatment and you could save taxes through the deductible interest expense on the debt used to purchase their shares.
    Clayton Capital Partners can assist you in meeting your goals. If you would like to explore if one of these alternatives is appropriate for your business, please contact Craig Herron at
    (314) 725-9939 x528 or cherron@claytoncapitalpartners.com.

    deal team


    Kevin M. Short
    Managing Partner & CEO



    Brent A. Baxter
    Managing Director

     

    John H. Brown
    Managing Director - Denver


    Mark W. Flenniken CExP
    Managing Director - Dallas

     

    Paula K. Reeb, CPA
    Vice-President Finance

      

    Craig M. Herron, CFA
    Director

      

    Carter Williams, CPA
    Director

      

    Ronald P. Zimmerman

    Director, Exit Planning

     

    Thomas L. Schlesinger

    Director

     

    Christy C. Viviano

    Senior Associate




    Jeff L. Bush

    Senior Associate


    David T. Kronenfeld

    Associate

    What We Do...

    -Represent sellers of businesses with revenue of $10MM to $250MM
    -Represent corporate buyers in strategic acquisition searches
    -Assist business owners with planning their exit


     

     

     

    For additional information about these deals, please contact Kevin M. Short at (314) 725-9939 x525 or via email at kshort@claytoncapitalpartners.com.
     


    Clayton Capital Partners Clayton Capital Partners Clayton Capital Partners