Brazos Partners: The CoMark LBO
What is Brazos' strategy? What differentiates it from that of other buyout funds?
The main aim of the company was to pursue transactions that could deploy between $100 and $500 million of equity. Brazos' strategy focuses on buying out of companies with the valuation of approximately between $25 and $250 million. This strategy builds on proven cash flow and effective management in the United States of America. The strategy focuses on Texas and Southwest thus differentiating it from other buyout funds. Other buyout funds have minimal emphasis on the region thus crucial to the efficiency of the transaction.
What is the GTT (Generation Transfer Transaction)?
Generation Transfer Transaction refers to tax-efficient structure or measure that avails liquidity to supplement continuity in operation control for the owner, in addition to flexible capital structure, to foster future growth and development. General Transfer Transaction aims at solving situation in family-owned businesses where the founder experiences much risk due to concentration of the family's net worth in the business.
This makes it fall in the plans of the Brazos. CoMark also possesses the advantage by being a company of two owners or proprietors. This opportunity by CoMark presents effective and efficient advantage to Brazos to make investment thus conduct extensive transactions.
How did Brazos make itself comfortable with the transaction while other funds passed? What does the planned financial structure look like?
Brazos applies the use of General Transfer Transaction model to acquire the favorable situation within the procurement process. GTT would allow the organization to control slightly above the average of the common stock of the new company. This financial structure also ensures that mangers obtain liquidity for their holdings while in the possession of strong incentives of considerable equity ownership. The new cash (reinvestment) would evade…
