Step One: Introductions

 

Business owners can contact me directly to determine if we are interested in acquiring their company or partnering with them to invest in and help grow their business. To see if Linea Capital might be a good fit for you, please see our Investment Criteria document. In other cases, intermediaries, including business brokers, investment bankers, commercial bankers, accountants, etc. introduce business owners to Linea Capital. Frequently, the intermediary has been engaged by the business owner. Intermediaries can help owners reach a larger pool of buyers, guide owners through the sale process and assist owners in identifying qualified transaction advisers (such as attorneys). Choosing an intermediary—or not—is a personal decision. We have established relationships with intermediaries from all over the country and would be happy to make introductions to them.

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Step Two: Preliminary Review

 

Once we have determined that your business meets our investment criteria, and you have determined that Linea Capital is a legitimate buyer, we typically exchange a Confidentiality Agreement (CA or NDA), so you can share the following information with us:

 

• Summary of the needs of the business owner (outright sale, recapitalization or partial sale, management buyout, etc.)

• 3–5 years of financial results (P&L and balance sheet)

• Review of annual Owners Benefits

• Summary of top customers

• Other information that is particularly relevant based on the type of business (such as, annual capital expenditures in a capital-intensive business)

 

After reviewing this information and a follow-up telephone conversations, we will either confirm our interest and discuss next steps or politely decline. If we move ahead, Linea Capital will typically issue a term sheet and arrange an on-site visit.

 

Step Three: From Term Sheet to LOI

 

After a successful visit, the process becomes more involved and more formal. Additional information is exchanged, and another site visit will take place. As we continues to learn about your business, and you learn more about us, further discussions regarding company valuation and transaction structure occur. The term sheet from Step 2 may be revised multiple times during this stage and, eventually, lead to a formal Letter of Intent.

 

A Letter of Intent, or “LOI”, is a formal, written document indicating the terms a buyer is offering a seller in a proposed acquisition or investment. A LOI states a serious intent, by both parties, to carry out the proposed transaction. Linea Capital is very selective about issuing LOIs because they indicate that we will be dedicating substantial resources to acquiring your business under the terms outlined in the LOI.

 

Step 4: From Letter of Intent to Closing

 

Due diligence is a rigorous 60-day review of the business and includes a detailed analysis of accounting history and practices, operating practices, customer and supplier references, management references and market reviews. The due diligence process is managed by a Linea Capital partner with the assistance of third party advisers such as accountants.

 

Linea Capital has the capital required to complete acquisitions. But in a typical structure, we use some form of debt financing to supplement our equity capital. The debt financing process includes identifying lenders interested in partnering with Linea Capital to complete the acquisition. Linea Capital maintains a large contact list of low-mid market lenders that we will partner with to complete the acquisition.

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The final step in the acquisition process is the legal documentation and funding step. Upon completion of the legal process, the acquisition funds are wired to the seller and the acquisition is complete. When the deal is finally done, we can celebrate the beginning of our mutually beneficial and profitable future together!