Stone Fox Ventures generally focuses on the transactional tax nature of the deal, to maximize net proceeds to the previous shareholders, and maximize income deductions in the process, in the most tax-efficient way possible. Generally, this is accomplished through a combination of asset, stock and continuing employment and consulting agreements. By focusing on net proceeds, Stone Fox Ventures is able to complete transactions that would otherwise not be achievable, often entering into purchase agreements with a higher return to ownership than would have otherwise been allowable by present cash flows.
Our firm funds these transaction primarily with a leveraged buy out method, through an infusion of equity and debt financing, utilizing the company’s cash flows and assets as collateral to secure the assets and / or stock of a target investment. Each deal structure is unique, in that ownership generally has it’s own goals and objectives. Stone Fox Ventures strengths lie in connecting the desires of the shareholder with the reality of the deal. Assumptions in purchase prices, normalization of net income, deductiblity of cash expenditures, amortization schedule, discounts and premiums, all influence the formation of a deal and the ability to finalize the transaction.
Underperforming investment opportunities require a unique approach to deal structuring as they frequently have negative cash flows and insufficient collateral due to recent continued losses. Definitive agreements are executed, replacing executives and directors in investment opportunities and locking up stock rights for future purchase.This deal structure generally allows existing debt to continue, without triggering a default, while the necessary turnaround actions are implemented. Lengthy holding periods are sometimes necessary to reach covenant levels where an LBO may be initiated.
Our firms objective is to executive a leveraged buy out, through an infusion of equity and debt financing, utilizing the company’s cash flows and assets as collateral to secure the assets or stock of a target investment. Middle-market acquire and grow investment targets are excellent opportunities for an LBO model, creating opportunities for debt retirement and capital to fund growth.