When you spend years building a business—making countless decisions to overcome challenges and reach stability—no decisions are more significant than choosing a path for an ownership transition or taking on capital to grow. Upon considering the more traditional offerings, such as a private equity investment or sale to a strategic, you may find yourself wishing for an “off the menu” option. That could mean maintaining the business as a standalone entity. Maybe you’d like to avoid debt. Or perhaps local ownership is critical to the company’s future growth.
Cascadia Capital created its Private Capital Group (“CPC”) for companies seeking creative transaction approaches not available in typical processes. We recently had the privilege of closing two transactions under this umbrella—a pair of customized solutions that met the unique needs of two Pacific Northwest businesses.
In a recent confidential transaction, we partnered with a leading independent sponsor and a company’s existing ownership to recapitalize the business to provide liquidity to the founding shareholder and growth capital for organic and inorganic growth opportunities.
In another situation, CPC assembled a group of strategic investors to acquire 100% of OVS Equipment Solutions (now Oregon Equipment Sales), a regional agricultural equipment dealer that was being divested from a private equity backed business. The investor group—including family offices, industry partners, and Cascadia principals with experience in the agricultural equipment sector—partnered with the strong existing management team to execute the transaction.
Both transactions leveraged the core capabilities of Cascadia Private Capital:
- Industry knowledge;
- Creative solutions;
- Experienced and flexible capital
Our CPC team works to lead this type of “third-way” transaction, leveraging patient capital and our firm’s relationships with family offices and other long-term investors who want to back mature companies that generate income and wealth for business owners in the Pacific Northwest.
Through our relationships, we encounter many business owners for whom the usual choices aren’t a good fit. Some own businesses that are critical suppliers to giant corporations that are pushing the business to grow or expand beyond the comfort level of the original owners. In those cases, our role is to find sources of capital and additions to the management team who can lead that company to its next stage with minimum risk.
We also encounter situations in which family owners or founders are seeking capital for stakeholder liquidity and next-level growth while maintaining minority or majority ownership and operational involvement but have reservations or hesitation around traditional private equity or institutional investors.
And then there are the situations (as with OVS Equipment Solutions) where private equity firms want to divest locally headquartered companies that may no longer align with their strategy. From our perspective, that’s a great opportunity to re-establish local ownership—and we have a relationship network of high-net-worth individuals and family offices with flexible investment horizons to bring the right partners to the table alongside our team.
In contrast to independent sponsors and private equity funds who may run the same playbook on every transaction, Cascadia Private Capital constructs each transaction collaboratively and from the ground up:
- Initial Consultations: We want to get to know the business’s owners and other key stakeholders. Once we understand the history of the business, any relevant family ownership dynamics, market positioning, and the enterprise’s relative strengths and risk areas, we can better assess what the future might look like and think creatively about how to achieve critical growth objectives.
- Ideation: In most situations, our team can whiteboard multiple transaction structures, taking into account current ownership and the company’s strategic and financial objectives for the future and giving owners a range of paths and options to consider.
- Introductions and Networking: Once we collaboratively agree on an approach and structure, our professionals leverage their networks to introduce possible co-investors and assess their fit with ownership and interest in a potential partnership.
- Ongoing Involvement: Cascadia takes an equity position in all CPC transactions and remains involved with the business as a trusted advisor following the completion of the transaction. Cascadia involvement can range from participation on the company’s board, acting as an outsourced corporate development arm that seeks add-ons and other strategic transactions to support the business, or other consultative work that advances the interests of the business and its shareholders.
We believe the CPC approach holds particular appeal for companies in mature, stable sectors, including but not limited to manufacturing, transportation & logistics, distribution, and oil & gas—companies that generate consistent cash flows across market cycles.
Businesses in these traditional sectors can often feel unloved in a more traditional M&A process. However, these companies can be well positioned to achieve attractive, accelerated growth with the right structure and group of investors who can bring domain expertise, strategic and operational insights, and have a similar long-term growth focus as the current ownership. That’s where deal magic can really happen!
We encourage any business owner who wants to assess a full range of options for their business to reach out—we are always quick to respond and eager to learn more.