The Lorraine Difference

Not all exit strategies are created equal. The table below highlights the Lorraine advantage compared to other exit strategies.

Lorraine Capital, LLC

Traditional Private Equity (Financial Buyers)

Business Competitors (Strategic Buyers)

Employee Buyout

Commitment to Acquired Firm’s Success

Committed to local, strategically complementary portfolio Acquired firm is one of many companies within a broader portfolio Acquired firm is subsidiary or division of larger entity Acquired firm is the sole focus

Buyer’s Day-to-Day Focus

Involved, to the extent necessary, in day-to-day decisions and planning sustainable financial growth Finding other companies for portfolio; raising new equity capital for fund Driving financial performance of corporate parent Planning and executing growth

Source of Capital

Local investors with solid contacts and deep business experience Large pension funds, insurance companies, endowments and institutions Diverse base of public and/or private investors Difficult to obtain; employees are inexperienced at raising capital and typically unable to do so

Value Creation

Nurture financial performance, improve operations, identify and execute growth opportunities Financial engineering, aggressive cost cutting Synergies with parent business and cost cutting through asset integration or divestiture Aligned with long term ownership

Time Horizon

No fixed period – whatever is in best interests of business 3-5 years depending on fund timing Long term, but subject to ongoing fit with parent company strategy No time frame

Participation of Acquired Firm

Flexible, complete exit or ongoing participation Typically require 2-3 year commitment Varies Typically ongoing

Legacy and Community

Committed to preserving ethos, legacy, and relationships of company Depends Depends Committed to the longevity of the firm

Deal Structure

Ability to move quickly with flexible terms that accommodate the seller Terms driven by institutional investors, closing time dependent on buyer’s other deals and priorities Designed to protect the buyer’s corporation and not seller’s company or employees Often drags on given the employee inexperience with these types of transactions and, if the deal falls apart, can result in hard feelings between ownership and employees