Private Equity Isn’t a Monolith: Why Strategic Recapitalizations Are Changing the Game
Not all PE deals are exits. Some are the beginning of something bigger.
A New Kind of Deal: Majority Recapitalizations
Private equity isn’t always about complete buyouts. Recent trends show a more collaborative approach through majority recapitalizations—where PE firms acquire 80% of a business while founders retain 20% and stay involved in operations.
In one case, a PE firm brought in a COO to streamline systems, allowing the founder to focus on business development. As the founder said, “Thank God. I never want another HR call or to hear about a broken truck again.”
In another case, the operational load was lifted so the founder could return to his true passion: engineering.
Not a Full Exit—A Strategic Partnership
These weren’t traditional exits. The founders received meaningful liquidity for the 80% sold, but kept 20% for future upside—often referred to as the "second bite of the apple."
With capital, infrastructure, and bolt-on acquisitions from their PE partners, the business could grow significantly over 3–5 years—potentially making that 20% worth more than the original 80% sold.
The Private Equity Playbook: Creating Value Through Scale
- Buy small businesses at 2–4x EBITDA multiples
- Combine them into a larger platform
- Sell the platform at 7–8x multiples
This scaling strategy reduces risk and increases valuation—turning small companies into high-performing assets.
Conclusion: Growth Over Exit
Private equity is evolving. It's no longer just about exit strategies—it's about building something bigger. Founders can reinvest their passion, gain strategic partners, and enjoy both liquidity and long-term value creation.
In this modern PE world, success isn’t just about what you sell—it's about what you build together.
📌 Related Services to Explore
Investor-ready business plans, ESG reports, and feasibility documentation.
👉 How to prepare Investor-ready business ? Project Readiness Consulting services
Modeling, pitch decks, and investor strategy for PE, VC, and DFIs.
📈 Explore CFO Services
Align projects with green finance frameworks and institutional capital.
📘 Explore ESG Advisory