Matrix Capital Markets Group (804) 780-0060 - Case Study: The Tharpe Co., Inc.

Case Study: Tharpe - Recapitalization

Situation

The Company is a privately held corporate gift and employee recognition program provider with annual revenues exceeding $40 million. The founder, who owned 70% of the company was seeking liquidity for his investment and a financial partner to work with the management team to continue growing the business.

Objective

Matrix’s mandate was to recapitalize the business with a financial sponsor to provide liquidity for the company’s founder and other shareholders, while preserving their ability to continue to participate as equity participants in the recapitalized company.

Solution

Matrix conducted a broad auction process focused on the financial buyer community due to seller’s desire to keep the business intact for the existing employees.
Having relationships with hundreds of private equity funds, Matrix analyzed the market and identified equity sponsors that would likely be interested in a leading business services provider catering to Fortune 500 and middle market companies.
Matrix structured a $37.5 million recapitalization of The Company. The transaction structure enabled the founder to reinvest a portion of his proceeds in order to maintain over 10% ownership of the new company. Further, participation from the management team resulted in approximately 35% of the recapitalized company being owned by members of the existing management team and the company’s independent sales representatives.
Matrix managed the transaction from start to finish, successfully negotiating significant liquidity for the Company’s shareholders, while providing the company with a financial partner to fuel future growth.