DHH can offer flexible solutions that meet owner’s needs depending on transaction type. Some of the typical options are:
Providing finance for organic growth and new acquisitions
Most common option when doing transactions within our “Innovation” strategic focus. DHH provides capital to finance growth in exchange for initially a minority equity stake in the business with a contingent option to buy majority in a 5-7 year term. Also possible for the purpose of financing targets acquisition appetites, in which case DHH seeks majority interest in the platform company.
Partial cash-out while retaining autonomy and control
Most common solution for owners who are also managing the day-to-day operations wishing to liquidate part of their ownership and enjoy the hard earned success, while retaining the full control. DHH can offer a cash purchase of minority and majority equity stake with the option to increase its ownership in the future with cash/DHH shares.
Complete cash-out of owners in partnership with management (MBO)
Suitable for businesses with separate ownership and management functions. DHH looks to partner with current management to facilitate the buyout by offering a cash purchase of 51-60% of equity while requiring the management to put up the rest with the option to increase its ownership in the future with cash/DHH shares.
Suitable for: Expansion
Complete cash-out of owners at deal closing
This option is available to business owners where DHH already has a platform company operating in the same market and is not interested in keeping the management. DHH seeks a 100% asset acquisition at closing.
Suitable for: Consolidation
Complete cash-out of owner/manager after a lock-in period of 3 years
Owner/manager wishing to fully retire from his business can do so after a period of 3 years. In this period DHH expects the owner to devise a succession plan and train the new CEO before transferring the management function. Owner can choose to be paid in cash or with the mix of cash and equity thus having the possibility to benefit from future equity upside of the combined business.
Suitable for: Expansion
Partial cash-out and inclusion in the equity structure of DHH and assuming a role at the group level
This option is interesting for entrepreneurs looking for new career challenges after a 3-year lock-in period. DHH can offer owners partial liquidity at first (buying minority or majority stake) and different opportunities as equity partners looking to start/buy new businesses or assuming group management roles in the future.
DHH is dedicated to maintaining high certainty and speed to close. As a publicly traded company, we are able to raise needed capital from institutional investors on an opportunistic basis which puts us in a position to move without delays from first introduction to the time of closing. Our process is designed to close the deal as fast as 1 month from first introduction. Here is a typical sequence you can expect:
Step 1: INTRODUCTIONS
After the first contact is established and there is a general interest from both parties, we organize an introductory phone call to present our ideas and determine if there is a good fit. Oftentimes, entrepreneurs are not immediately ready to start an investment process, but find that mutual introduction is a good start to getting familiar with the possible ways they can benefit from this relationship in the future. Typically we determine fit right during the call or a few days later, after we review the ideas and make a decision.
Step 2: Preliminary review
Once we have determined that your business meets our strategic criteria, and you have determined that you are interested in reviewing our proposal, we typically proceed by exchanging a Non-Disclosure Agreement so you can share with us some basic information that we need to perform the initial analysis.
Step 3: Expression of interest
After reviewing the information we will either confirm our interest to move ahead or respectfully decline the opportunity. In case of a serious interest, typically within 10 days from the introductory call, we will provide you with a preliminary proposal of valuation and deal structure. We start discussing it together and if we determine that we are in the same range in terms of valuation, we organize an in-person meeting to discuss more details.
Step 4: Letter of intent
After a successful meeting, as we learn more about your business and keep an open discussion, the terms of the preliminary proposal can get revised multiple times before they result in an LOI. A formal letter of intent sums-up in detail the conditions of a transaction, on which basis we proceed to step 5.
Step 5: Due diligence
Once the agreement has been reached on all the items of the LOI and the document has been signed, we start the official due diligence process. The process is managed by DHH with the assistance of third-party advisors and can take up to one month.
Step 6: Closing
As soon as the due diligence is finished, we close the deal by signing the final agreement, making the act at the notary and the payment. The whole process from introduction to the closing usually takes 1 to 3 months (depending on the complexity of the due diligence).