Non Control Investments

Non Control Investments in a Closely-held Business

One of the most difficult decisions for a closely-held business is to allow outside shareholders into their company. An ill-advised decision can take years to unravel and at a cost. Since 2015, ARC Group Holdings has successfully partnered with numerous closely-held businesses, often through multiple liquidity events and generational change. As we state in our Group Philosophy, we view all of our operating partners – past and present – as references that help sellers make an informed decision about partnering with ARC.

We recognize that long-term management owners focus on the continuity of their business and that retaining control of their company is desirable in any decision to bring in an outside shareholder. ARC Group Holdings is a dedicated minority investor with over 7 years of experience in working with controlling shareholders, without having the requirement of day to day control and with no restrictions as to the holding period of any investment.

Our role is to assist in the future growth and development of the company. We achieve this in different ways for different companies. Some typical situations where we help family-held businesses are in:

  • Providing liquidity to shareholders – allowing owners to release some of the value they have built in their business without surrendering control;
  • Accelerating growth plans by sharing vision and risk;
  • Seeking and executing transformational acquisitions;
  • Entering new geographies and markets;
  • Increasing levels of equity for management;
  • Introducing key resources such as new executive management, non-executive directors, and access to new customers, suppliers and financing sources;
  • Relieving over encumbered balance sheets, and
  • Assisting in estate planning and the generational change in the ownership and management of the company.

We understand that a private equity investment is not the only capital alternative for a closely-held business and within the private equity industry there are a variety of approaches to investing in closely-held businesses. ARC Group Holdings seeks to participate as an active partner where there is a shared vision for growth and to enable the closely-held business to draw on our resources and experience to complement their ambitions.