Solutions for your entire business cycle

Should I strive to grow my business, transition it or sell it outright?

The proper life cycle planning strategy depends on timing within your company’s life cycle. We’ll work with you to understand your company’s financing, capital structure, product development and long-term strategic plan so that we can help you determine how best to move forward.

Expanding
To start your planning, we can help you understand the risks and opportunities of expanding your business.

Assessing attractiveness and readiness
Understanding the value of your business, its current condition to a potential buyer and your own readiness to exit are essential steps in the transition process.

Customized lending
To help gain pre-sale liquidity, we can offer solutions through our extensive boutique Investment Bank network. This may include leveraging your restricted shares in support of securities-backed loans, mortgages and tailored financing.

Have you prepared your estate for your business sale liquidity event, and have you considered the people most important to you?

Succession planning
We can work with CPAs and attorneys to help create customized cash flow models comparing the economic benefits of various succession scenarios. We’ll look at tax-efficient ways to exercise stock options.

Selling your business
Our process offers detailed cash flow modeling, clearly illustrating what it would look like to sell to a strategic buyer, sell to a financial buyer, utilize a dividend recap or sell to an ESOP.

Tax strategies
Working with your tax professionals, we help you develop tax-efficient strategies for exiting your business, reducing estate tax exposure, preserving assets and transitioning wealth to future generations.

Have you explored the right ways to support your legacy and giving needs, before or after the sale of your business?

Your post-exit plan
We can help you develop a tailored plan to transition from a K-1 distribution or salary to living comfortably off your investment income.

Personalized portfolio management
Post-exit, we manage your capital in an endowment-like fashion, matching cash flow needs with your long-term goals. We’ll design and execute customized investment strategies based on your plan.

Legacy and philanthropic planning
We have the experience and the network to help with protecting your assets, reducing estate tax exposure and transitioning wealth to future generations.

The situation
We met our two clients, a Founder and President, just two years into their company’s existence. They introduced us to other key stakeholders, both relatives and employees, who also became clients in short order. Together, our clients owned approximately 40% of the company.

For each client, financial and estate planning was virtually non-existent prior to meeting our team. Their company was quickly becoming a major player in its space, and they were fielding unsolicited offers to acquire it. A sizable exit, in due time, was the likely outcome.

The strategy
Our end-to-end process and ongoing relationship focused on providing comprehensive guidance from the beginning stages of the company with $250k revenue, to five years later when it hit $100M in revenue, to the point at which they were ready to sell for close to $1 billion. As we approached our clients’ liquidity event, we needed to work diligently with them to: 1) provide education on pre-liquidity estate planning strategies so that their long term objectives were tax-efficiently addressed in estate planning documents; 2) plan for cash flow needs through their exit; and 3) address potential risks.

Because we have experience working with many entrepreneurs through the sale of their businesses, and we have forged the appropriate relationships inside and outside of UBS, we were able to help ensure that clients optimized their exit. After various individual meetings with each client, we began to execute on a prioritized road map of deliverables, some known upfront and others that materialized along the way.

The result
When the day arrived, our clients sold their company with all of their “i’s” dotted and “t’s” crossed. They felt confident that they had maximized the event. With a successful sale, one client is now a key senior executive for the acquirer. Another is working with UBS to explore the potential of establishing a family office for the benefit of all family members.

The situation
Our client is the Founder and CEO of a company that was in the midst of closing the first tranche of a $100 million Series C funding. He introduced our team to his CFO to discuss the company’s cash management approach and to help determine if it could be enhanced.

Up to that point, the prospect of enhanced yield and a more robust approach to cash management had not been a priority. Now, our client wanted to ensure that he and the company were being wise stewards of their soon-to-be raised capital.

The strategy
Our team met with the company CFO to discuss their existing Investment Policy Statement and assess the cadence of expected cash flow and various concerns that were top of mind. Four goals were promptly identified during this and subsequent conversations: 1) potential for greater yield while maintaining focus on daily liquidity, operational needs and preservation of capital; 2) portfolio diversification aligned with their concern for greater yield; 3) adoption of a well-constructed Investment Policy Statement (IPS) focused on yield and diversification; and 4) providing the CFO, Controller and their teams with finger-tip access to an array of on-demand, detailed and compliant reporting capabilities.

Our team was agnostic and presented various cash management solutions. Specifically, we offered an introduction to multiple cash management teams inside and outside of UBS. We assisted our client in reviewing various cash management groups to assess the integrity and robustness of the company’s preexisting IPS. Recurring feedback from those vying for the cash management mandate showed us that various segments of the IPS could be improved upon for the benefit of the company and its fiduciaries.

In the end, the client hired UBS’s Asset Management (AM) to manage the assets and our team services the relationship from a banking and portfolio commentary standpoint. Additionally, AM’s portfolio managers avail themselves to the client by phone and in-person.

The result
We moved the needle for the client in a meaningful manner. Portfolio yield increased by approximately 150 basis points. This incremental income enhanced portfolio income by more than $1 million. Today the UBS portfolio is robust and diversified. It is allocated to A-rated or better fixed income instruments and, per their IPS, maintains a portfolio duration of less than 0.30.

On-demand reporting capabilities are provided (at no charge) to our client through AM’s relationship with a leading third-party provider. They offer robust web-based investment portfolio accounting, reporting and reconciliation services for institutional clients overseeing more than $3 trillion in assets.

The situation
Our clients owned and operated a very successful industrial and commercial demolition company. They were resigned to the fact that they would reduce their risk and liability by exiting the business at some point in the future, but were in no particular hurry and had no formal business exit strategy in place.

Out of left field. Our client unexpectedly called us one day upon receiving an unsolicited offer to acquire their business.

It was apparent that the clients were interested in entertaining the offer which valued their business at approximately $14 million. We pointed out a few concerns: 1) our client did not have a stable of metrics available to him to assess the appeal of the offer, and 2) as this was a direct, unsolicited and unexpected offer from the strategic, our client did not have advisors representing the family’s interests. After a little back and forth, our client agreed to allow us to bring certain professional value-add resources to the table. The offer was ultimately not accepted.

After some initial hesitation, we persuaded our clients that they needed to enlist professional resources to help them with the deal.

The strategy
Creating competitive tension. Our team drew upon the vast resources available at UBS, particularly with the Business Development Group which pointed us in the direction of several boutique investment banks potentially suited to represent the client. After interviewing and personally vetting several of them, we presented two banks to our client, they favored one, and this boutique banker was tasked with creating the competitive tension necessary to elicit the best offer.

Putting the pieces in place. The first order of priority was to get the company’s books in order over the course of a couple of months. In tandem, our clients were brought up-to-speed about what to expect from potential acquirers and how to respond. Soon after, the investment bank went out to market and invited offers. Over the course of nine months, several legitimate offers were vetted, which were whittled down to three as possibly acceptable to the client: two from private equity and one from a family-owned business of similar size. The client agreed to terms with the family-owned enterprise for $42 million.

An unexpected twist. Just weeks before the deal was to be executed, it fell through due to unforeseen issues from the purchasing party who requested more time due to an issue outside of this deal.

Capitalizing on momentum. Now in a position of strength and clarity, the client and its investment bank contacted the initial $14 million offer to educate this national strategic on the intrinsic value of the asset and its potential. The client ultimately closed the purchase at $42 million, three times its original offer from this strategic, and at very favorable terms.

Long before the sale, we started educating the client on planning for the wealth that would result from the sale. We enlisted the help of the Advanced Planning Group and Portfolio Advisory Group at UBS to create a plan that explicitly matched our client’s capital to their goals and associated time frames of these goals.

Our client fully embraced the UBS Wealth Way framework. A comprehensive financial plan serves as the blueprint for a three-pronged, endowment-like approach to our client’s financial life, organized into three key strategies: Liquidity—discipline to address client cash flow needs for the next 1 – 5 years; Longevity—discipline to fund the net present value (NPV) of our client’s lifetime cash flows and the Legacy—discipline to address the needs beyond their own (family and philanthropy, for example).

The results
The value-add our team can bring to the table often times starts long before we manage a single dollar of client capital. We recognize that successful planning—before, during and after an exit, has the potential to move the proverbial needle for our clients more so than anything else outside of their stake in the business itself. Sometimes life sneaks up on us, and sometimes it plays out as expected. Either way, a thoughtful, attentive plan is always preferred to one that’s ad hoc, and is certainly preferred to none at all. In this case, our client was able to leverage their pre-exit estate and financial planning into an outcome that was on their timeline, intentional and tax-efficient. As we’ve transitioned into the next, post-exit phase of the relationship, a multitude of UBS resources continues to be brought to bear to address a wide variety of our client’s initiatives.