F I NA NCIA LLY E NG I NE ER E D H Y BR I D G R O W TH C A P I TAL CBRE CLICK TO EDIT MASTER SUBTITLE STYLE CLIENT NAME | PRESENTATION TITLE EN ABLIN G G ROW TH VIA FIN AN C IALLY EN G IN EERED HYBRID C APITALIZATION Growth Partner Focus: 4 Key Areas Enabling Growth Significance of the Capital to Fund Growth As a growth partner to our clients, we focus on identifying organic At some point in a company’s ongoing growth, it will require and inorganic growth opportunities for our clients but more outside capital to fund it. The benefits of a financially engineered importantly we ensure that each of the 4 key aspects that hybrid capitalization that includes recapturing the capital that is determines what level of growth is achieved fully support the trapped in the company’s real estate & other assets can be growth strategy as any shortfall in any of them supporting the redeployed to fund the growth of the company and for a large strategy will result in a shortfall in the level of growth achieved capital raise will reduce: translating into a reduced discounted ROI. Weighted Average Cost of Capital (Valuation Discount Rate) & Any Required Ownership Dilution in the Company Gary T Saykaly | CBRE |National Advisory – M&A 360o T +1 303.264.1907 | C +1 404.666.4887 | gary.saykaly@cbre.com CBRE CLICK TO EDIT MASTER SUBTITLE STYLE CLIENT NAME | PRESENTATION TITLE REAL ESTATE MONETIZATION+CORPORATE DEBT/EQUITY CAPITAL THE CORPORATE EQUITY CAPITAL TRANCHE The corporate equity tranche is the most expensive capital within the capital stack & includes some level of ownership dilution – if a large corporate equity capital request, the investor might require a majority stake hold interest in the company. REDUCED OWNERSHIP DILUTION The goal of a financially engineered capitalization is to achieve the lowest cost of capital where the lower cost of capital tranches are layered in first with the intent that it will significantly reduce the amount of the corporate equity capital raise – possibly only requiring the company to give away a minority stakehold interest vs majority. PROGRAMMATIC REAL ESTATE INVESTMENT ARRANGEMENTS Following the monetization of the existing owned real estate and other assets, a company’s future real estate and market expansions can be efficiently capitalized via programmatic investment arrangements with 1 or more investors/lenders which define the parameters that the investment capital will fund including for: BTS financing & forward take-outs, sale leasebacks, owner occupied property refinancing and Joint Ventures. CBRE CLICK TO EDIT MASTER SUBTITLE STYLE CLIENT NAME | PRESENTATION TITLE REAL ESTATE MONETIZATION+CORPORATE DEBT/EQUITY CAPITAL PHASE I: Unless there is a strategic PHASE II: REAL ESTATE MONETIZATION purpose or a market CORPORATE CAPITALIZATION limitation, there is no Required Industrial Facilities: Sale reason for a growth Debt: Senior Secured or Unsecured Leasebacks – Synthetic or Operating focused company to have capital trapped in their owned real estate. Owner Occupied Facilities: Debt: Subordinated/Junior Refinancing The recaptured capital has multiple uses including: Non-Fit Real Estate Sales: Equity: Direct Private Investment Vacant or Leased-Up as ST or MT 1) Reducing the corporate capital request as corporate equity is expensive, Equity: Private Placement – Reg D/A+ Non-Fit Other Assets 2) Redeploying the capital Economic Incentives: New or back into the company to IPO: Direct, SPAC, Reverse Merger Expanded Industrial Facilities fund business growth. CBRE CLICK TO EDIT MASTER SUBTITLE STYLE CLIENT NAME | PRESENTATION TITLE FUTURE REAL ESTATE EXPANSION DEVELOPMENT CAPITALIZATION A SAMPLING OF ALTERNATIVE METHODS The chart on the left translates into M&A success. CBRE’s M&A 360o Post-Close Success solution significantly enhances each of them and allows the acquirer to benefit from the desired revenue and cost synergies in a compressed time during the post-close integration & transition process. The two big reasons that a high % of M&A deals fail are: 1) not integrating the two companies quickly post-close and 2) not quickly executing on the infrastructure redesign to fully support Gary T Saykaly | CBRE |National Advisory – M&A 360o T +1 303.264.1907 | C +1 404.219.3660 | gary.saykaly@cbre.com CBRE CLICK TO EDIT MASTER SUBTITLE STYLE CLIENT NAME | PRESENTATION TITLE EN ABLIN G G ROW TH VIA FIN AN C IALLY EN G IN EERED HYBRID C APITALIZATION CBRE CLICK TO EDIT MASTER SUBTITLE STYLE CLIENT NAME | PRESENTATION TITLE
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