Exit Planning for a Family Business Transition

Interchange Capital Partners worked with a long-time client, a family-owned business led by two brothers who had grown the company significantly over the years. Initially, the business was intended to remain in the family for future generations. However, the brothers eventually decided not to pass the business on to their children. Their goals shifted toward de-risking their financial lives, gaining liquidity, and preparing the business for eventual sale while supporting their families in exploring careers in other industries.

The family faced several obstacles in their exit planning:

• Their net worth was heavily concentrated in the business, creating financial risk.

• A previous minority ownership arrangement had not met their expectations, which resulted in the need to repurchase those shares.

• They needed to identify a new minority partner with favorable terms to provide liquidity and position the company for growth.

• The family required a structure to manage the proceeds of the transaction and establish a long-term financial strategy.

Interchange played an integral role in guiding the family through this transition. Key steps included:

• Repurchasing shares: Interchange worked with the family and their legal counsel to repurchase the previous minority owner’s shares. They identified sources of liquidity across the family’s balance sheet and structured the financing through family trusts and business entities.

• Preparing for new ownership: Interchange collaborated with an investment banker to facilitate the sale of a new minority stake. They assisted in evaluating deal structures and worked with the family on tax, legal, and financial considerations to align the transaction with their long-term goals.

• Developing a future framework: With liquidity on the horizon, Interchange developed a tailored Spend, Live, GiveTM (SLG™) strategy to guide the family’s financial decisions and began establishing a formalized multi-family office structure to manage ongoing wealth.

  
  

Through this process, the family repurchased and sold minority stakes, reducing financial risk and unlocking liquidity, while a new partnership positioned the business for growth and a future sale. Interchange developed a tailored financial plan to manage distributions and investments.

For personalized guidance on navigating your family business transition, contact Interchange Capital Partners.

Interchange Capital Partners, LLC is registered as an investment adviser with the Securities and Exchange Commission (SEC). This communication should not be deemed as an offer or solicitation to buy or sell any product. Interchange Capital Partners, LLC does not provide legal, tax or accounting advice. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.