client journey

Navigating an ownership transfer between siblings.

One sibling had worked in his family business for decades. His future vision was to continue to run and grow the business, but when his father passed suddenly, he realized his siblings wanted to sell it.

90+

Years in Business

4

Generations

100%

Family Owned

66%

Repurchased Shares

profit increase - two young women sitting side by side at a long table looking at a laptop together

A Family Buyout

The CEO realized to achieve his vision he would need to buy out his siblings. The siblings were not interested in growing the value of their equity in the business, they wanted to cash-out right away. However, their equity in the business was split equally and the CEO did not have the cash on hand to buy their shares outright. He needed a solution that wouldn’t require the business to take on substantial debt to pay off the departing shareholders.

  • Only one sibling worked in the business

  • Ownership split equally between all siblings

  • Owners had different desires for the business’ future

  • The sibling in the business did not have the cash for a buyout

Client Results

The owner was referred to the Destined team who conducted a market valuation to align all siblings on the current value of the business.  But the most important step came in the Exit Option Analysis when the owner realized he had other options for the ownership transfer. He chose an ownership transfer option that would allow him to buy his siblings out over time using the profits from the business.  This option not only provided the owner with time, but also provided his siblings with significant tax savings.

  • Tax efficient buy-out for siblings

  • Preservation of family relationships

  • Individual financial goals achieved

  • Opportunity created for a fourth-generation ownership transfer

Exit Options Analysis
Valuation
Guided Project

“Never put business before family.” Walt Disney

CEO & Owner, Third Generation Manufacturing Company

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