Deal structure
A recapitalization changes a company's mix of owners and debt. It lets owners take cash out of the business while keeping part of the equity.
A recapitalization, or recap, resets who owns the company and how it is funded. An investor puts in money or buys shares. The owner takes some cash off the table and keeps a stake.
For example, an owner holds 100% of a business worth $30 million. An investor buys 60% for $18 million. The owner receives cash for that share and keeps 40%, now worth $12 million on those terms. The owner also gets a partner to fund growth.
Recaps matter because they offer a middle path. You get liquidity without a full exit. The two main types are majority recapitalization and minority recapitalization. Which fits depends on how much control you want to keep.
Capstreet states it invests in "Primarily majority investments" and that "Entrepreneurs reinvest alongside Capstreet". Read the full guide at recapitalization.
Related terms
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