How We Close Transactions

Trivest provides founders with a transparent, fair acquisition process designed to eliminate the traditional transaction pain points, uncertainty and difficult negotiations that permeate many M&A processes. We believe that the acquisition process is often the beginning of a long-term relationship, and we strive to begin that relationship with a positive experience. In fact, 10 founders from whom Trivest previously acquired businesses had such a positive experience that they chose to become investors in Trivest Fund V.

How do we make the transaction process fair and transparent? We identified the most common areas where acquisition processes fail and largely eliminated them for founders. Our process encourages you to Just Say NO! to these pain points put in place by other firms. Instead, we choose to conduct business in a different, more straight-forward manner:

just say no

.

To:

A Typical Deal

A Trivest Deal

Required Founder Reinvestment
  • Mandatory re-investment by the seller of 10-30%
  • No required rollover whatsoever… It’s your choice
Unfair Capital Structures
  • PE firm holds preferred stock, while seller re-investment is behind in common stock
  • If founder re-invests, no preferred stock structures; all Newco shareholders on same level with common stock
Escrows
  • Mandatory escrow of 5%-15% reduces seller’s cash proceeds at close
  • No escrow holdbacks; unique insurance policy enables public style deal
Indemnification
  • Numerous ongoing seller indemnification requirements create seller risk post-closing
  • No ongoing indemnification; unique insurance policy enables public style deal
Working Capital Adjustments
  • Complicated working capital adjustments often lower seller’s proceeds
  • Unless business is highly seasonal, no working capital adjustments required
Financing Contingencies
  • PE firm can walk away from a deal if bank financing cannot be secured
  • Shortens time to close and increases certainty; fund all equity (valuations up to $60 million)
Re-Trading
  • Rampant in the industry – the buyer lowers the purchase price as closing approaches
  • No Re-Trading – Since 2000, every signed purchase agreement matches signed letters of intent to the dollar

 

If you are a business owner and would like to learn more, please call us at 305-858-2200 or email us at founders@trivest.com.

Trivest also pays handsome referral fees for introductions to businesses that close.  To learn more about these incentive programs and find out how to submit a referral, please click here.