While Jobs’ observation may be true in many aspects of life, and the journey of building a market-leading business provides considerable emotional reward to all involved, financial benefits can be a very important outcome also.
RLH’s holding period typically ranges from four to seven years. With our focus on building the business through organic growth rather than financial engineering, time is required to achieve the full potential of the opportunity.
Most commonly, a larger corporate acquirer purchases 100% of our portfolio company in a cash transaction that provides complete liquidity for all shareholders. In consultation with the management and fellow owners of the company, we seek to select an acquirer that will provide a compatible culture, good career opportunities, and a fair valuation for the business. Occasionally, another private equity firm will purchase most of the portfolio company in a transaction that provides complete liquidity for RLH, substantial liquidity for management shareholders, and an opportunity for management shareholders to retain a portion of their equity and thereby participate in future upside.