Consider the following information for the CenDay Real Estate Development Company. No. of Employees +200; Annual Revenues +$20 million; Company History: The company was acquired by an investment firm five years ago. However, the anticipated synergies among the firm's portfolio of companies was never achieved and many of the top executives from these firms began quitting. The current CEO for CenDay led a management buyout from the investment firm portfolio to reestablish CenDay as a privately held company. This transaction was financed mostly by the personal capital of the firm's top managers, now partners. Following the buyout, CenDay began flourishing again through their commitment to client services. After several years of significant cash flow the CEO and other legacy partners began eyeing their own exits in order to retire and to harvest from their initial investments via the MBO. These partners however had several major concerns as they thought about exit. These included: - Exit valuation - The future of the company culture and reputation/brand they had worked so hard to build - Future growth of the company - Amount of time for an exit deal to be made and executed - Well-being of current employees The partners believe there are four options for exit: 1- Junior Partner buyout 2- Sale to a strategic partner (a firm with similar interests that would benefit from adding CenDay to its portfolio) 3- Cash out to public company (acquisition by a large firm) 4- Public Offering or partnering with private equity firm for large cash infusion Note: All of these options are available and realistic for this firm. In other words, questions about the size or revenues of the firm in terms of a public offering should not be considered. Likewise, you can assume the firm has some untapped value that make it attractive to a private or public investor. Discuss the "pros and cons" of each type of exit. (You should be able to list 2-3 pros and 2-3 cons for each). If you were a legacy partner at CenDay, what would be your preferred exit strategy and why? Consider the following information for the CenDay Real Estate Development Company. No. of Employees +200; Annual Revenues +$20 million; Company History: The company was acquired by an investment firm five years ago. However, the anticipated synergies among the firm's portfolio of companies was never achieved and many of the top executives from these firms began quitting. The current CEO for CenDay led a management buyout from the investment firm portfolio to reestablish CenDay as a privately held company. This transaction was financed mostly by the personal capital of the firm's top managers, now partners. Following the buyout, CenDay began flourishing again through their commitment to client services. After several years of significant cash flow the CEO and other legacy partners began eyeing their own exits in order to retire and to harvest from their initial investments via the MBO. These partners however had several major concerns as they thought about exit. These included: - Exit valuation - The future of the company culture and reputation/brand they had worked so hard to build - Future growth of the company - Amount of time for an exit deal to be made and executed - Well-being of current employees The partners believe there are four options for exit: 1- Junior Partner buyout 2- Sale to a strategic partner (a firm with similar interests that would benefit from adding CenDay to its portfolio) 3- Cash out to public company (acquisition by a large firm) 4- Public Offering or partnering with private equity firm for large cash infusion Note: All of these options are available and realistic for this firm. In other words, questions about the size or revenues of the firm in terms of a public offering should not be considered. Likewise, you can assume the firm has some untapped value that make it attractive to a private or public investor. Discuss the "pros and cons" of each type of exit. (You should be able to list 2-3 pros and 2-3 cons for each). If you were a legacy partner at CenDay, what would be your preferred exit strategy and why