Leveraged Recapitalization/Management Buyout

Mentor Securities effects leveraged recapitalizations for business owners who are not ready to retire and have built significant value in their businesses. In the typical leveraged recapitalization, a company (and the management team in a management buyout transaction) partners with a private equity group, which invests equity in conjunction with debt provided by senior and, possibly, mezzanine lenders. The debt obligations are secured by the future cash flows of the business. The cash may then be used for the purpose of redeeming shares from the shareholders at a capital gains tax rate.