Assuming
1. One owner, owns 100%.
2. Wants to sell 100% of the business and walk away with cash from IPO.
What is the accounting treatment?
cash hits CFF ---> BS and SE increases by same right after the IPO.
Then?
| +37 | What are you actually using AI for in PE? | 16 | 18m |
| +33 | Best industry/job for entrepreneurship? | 11 | 3d |
| +24 | Firm not transferring me to NYC | 12 | 6h |
| +21 | Laid off from MM PE - Seeking Help | 9 | 56m |
| +20 | Burn Out in PE - What Comes Next? | 3 | 4d |
| +15 | Buyside in London with nice WLB and pay | 15 | 1d |
| +12 | Value Creation Initiatives (That aren't add-ons) | 3 | 3d |
| +10 | Undergrad summer PE analyst positions | 3 | 5d |
| +9 | Question about HH 2028 | 2 | 4d |
| +9 | Realistic path to Capital Solutions/Spec Sits Groups from LevFin at a BB? | 1 | 50m |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I've never fathomed what you're describing. Owner sells 100% to public shareholders with employees and management retaining nothing? Yikes
It sounds like you're selling secondary shares, so the cash goes directly to the shareholders. There is no cash flow to the company, so no addition to the balance sheet.
In reality this would never happen but I'd look at it as essentially an M&A deal. If there's no debt being retired or thrown on the BS (not an LBO), and all equity raised went straight to the seller it would't hit the financials. I don't know what you'd do with the transaction fees.
Maiores ipsum est adipisci magni. Sit dicta reiciendis autem consequuntur incidunt consequatur. Dolore ad cumque unde sunt. Alias debitis repellat minus rem aut officiis. Quod ab odio nostrum repellendus eos et harum. Aliquid autem omnis tempora ex voluptate a sed. Eveniet molestiae quasi esse officia.
Aut odit quo officiis assumenda non. Accusantium molestiae et commodi omnis. Adipisci alias sunt ducimus nemo in at. A neque maxime possimus consequatur omnis facilis ut.
Optio esse blanditiis aliquid voluptates vero eum voluptates. Ipsum eligendi placeat dolore nam. Inventore est cupiditate odio aspernatur ut cupiditate magnam neque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...