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The presence of a majority shareholder in the business fundamentally changes the circle of potential buyers of minority shares, which in this case were put up for sale.

The sale is made either for the majority shareholder or the company itself. However, for this to happen, the company must be involved in debt financing that will absorb all of the company’s profits in a few years and prevent it from developing at the speed of the corresponding rate of market growth. The sale to an investment fund requires a transparent exit mechanism for the fund, which can be secured only with the help of a majority shareholder.

Thus, one of the options is a tripartite transaction in which the majority shareholder receives a part of the sold package in exchange of agreeing to ensure the exit of the investment fund entering the company through the repurchase of the fund’s share on the agreed horizon and on agreed terms that depend on the company’s profit at that time. Thus, the sold minority shareholding is reduced, but the number of potential buyers is significantly increased. This will result in the seller receiving not a lesser, but possibly a higher amount.

Business: $5M revenue, Ebitda $1M, more than 4000 paying clients per month.

Deal: Cash-out sale of a minority share.

Deal Industry: Internet

Deal Type: Sale the company