OfficeHours

JUNE 6, 2023

Leveraged buyouts involve acquiring a controlling interest in a mature company, typically through a combination of equity and debt financing, using the acquired company’s assets as collateral to secure debt financing. Private equity firms also invest in distressed debt or provide private debt financing.

Private Equity 147

Private Equity Equities Debt Investment 147

OfficeHours

OCTOBER 20, 2023

Inflation can also have an impact on the cost of debt required to finance an investment. Inflation itself does not directly affect the cost of debt or interest; rather, since inflation and interest rates are very closely related, changes in inflation impact changes in interest rates. Great, I’m learning a ton!

Investors 130

Investors Private Equity Equities Debt 130

Sun Acquisitions

MARCH 15, 2024

This blog post will explore why all-cash proposals are gaining traction and how they set themselves apart from other acquisition methods. Traditional financing methods often involve complex due diligence, negotiations with lenders, and lengthy approval periods, which can take months. This is where all-cash offers genuinely shine.

Acquisitions 59

Acquisitions Business Negotiation Debt 59

Cooley M&A

SEPTEMBER 25, 2020

In a May blog post we discussed several initial observations regarding the dozens of M&A transactions that were signed prior to March 2020 and that were in jeopardy as a result of COVID-19. In other words, the specific performance remedy is conditional, and neither buyer nor the sponsor can be forced to close without the debt financing.

Debt 40

Debt Finance Finance Private Equity 40

Sun Acquisitions

APRIL 26, 2024

This blog post delves into the intricacies of different financing models, shedding light on the associated risks and rewards. Debt Financing: The Double-Edged Sword Debt financing is a standard route for companies pursuing M&A, offering the allure of leveraging existing assets to fund the transaction.

Mergers and Acquisitions 59

Mergers and Acquisitions Finance Finance Mergers 59

OfficeHours

OCTOBER 23, 2023

Once the terms are agreed upon, the acquisition is financed through a combination of debt and equity from the PE firm , as with a typical transaction. This results in the target company receiving a potentially very different capital structure than they previously had, typically with higher debt levels. This will be helpful!

Investors 130

Investors Private Equity Equities Investment 130

RKJ Partners

AUGUST 6, 2017

In our latest blog installment, we define and outline the key elements involved in valuing a target company. The method assumes leveraging, whereby the cash flow of the company is used to pay-off the debt—ultimately building equity. As a result, the value of the company lies in its ability to repay the debt. What is Valuation?

M&A 40

M&A Valuation Mergers and Acquisitions Discounted Cash Flow 40

Sun Acquisitions

FEBRUARY 28, 2024

Negotiation Skills Negotiation is an art in itself. Be prepared to negotiate favorable terms to your side while ensuring a mutually beneficial outcome. Good negotiation skills can save you money and reduce post-acquisition conflicts. Debt Financing Debt financing involves borrowing money to fund the acquisition.

Finance 59

Finance Finance Acquisitions Business 59

Sun Acquisitions

MARCH 6, 2024

Negotiating interest rates, equity stakes, and purchase prices is a delicate process that involves convincing the other party that your terms are reasonable and beneficial. In this blog post, we will explore the strategies for mastering this art and achieving your goals in business acquisition.

Business 59

Business Securities Acquisitions Negotiation 59

Focus Investment Banking

MARCH 10, 2025

Optimize Working Capital (One Year Ahead) What It Is: Net Working Capital (NWC) is Current assets minus current liabilities (A/R + Inventory A/P + Accrued Expenses), excluding cash, which you keep (in a typical cash-free, debt-free transaction). Why It Matters: Healthy working capital keeps the business running smoothly day-to-day.

Investment 52

Investment Book-building Sale Business 52

The M&A Lawyer

SEPTEMBER 23, 2015

In this post on The M&A Lawyer Blog, I will: introduce the concept of Material Adverse Effect and explain its principal functions, present pro-buyer and pro-seller versions of MAE definitions and explain how, and why, they differ, including with respect to forward-looking language and common qualifications, and.

M&A 130

M&A Mergers and Acquisitions Negotiation IT 130

OfficeHours

JULY 18, 2023

If the larger roll-up acquirer has the ability to finance these acquisitions with incremental debt capacity, the equity value uplift may be even greater (although the reasons for this are beyond the scope of this article). This begs an important question: why do roll-ups receive a higher value than smaller acquisition targets?

Private Equity 130

Private Equity Equities Investment Mergers and Acquisitions 130

Sun Acquisitions

APRIL 17, 2024

In this blog post, we’ll explore the key steps to prepare your business for potential buyers in mergers and acquisitions. You need to understand how much your company is worth, which is essential for setting realistic expectations and negotiating with potential buyers.

Mergers and Acquisitions 59

Mergers and Acquisitions Business Mergers Acquisitions 59

Sun Acquisitions

APRIL 10, 2024

In this blog post, we’ll explore the key steps to prepare your business for potential buyers in mergers and acquisitions. You need to understand how much your company is worth, which is essential for setting realistic expectations and negotiating with potential buyers.

Mergers and Acquisitions 59

Mergers and Acquisitions Business Mergers Acquisitions 59

Focus Investment Banking

MARCH 17, 2024

Earnouts in M&A deal negotiations are a vital tool, offering sellers of fast-growing companies potential extra compensation and providing buyers with a risk-reduction method. However, negotiations hit a snag when the seller proposed retaining total operational control during the earnout period.

Professional Services 52

Professional Services Corporate Finance Mergers and Acquisitions Negotiation 52

Midaxo

APRIL 25, 2023

The rest of the blog consists almost entirely of questions and prompts that were posed to ChatGPT to obtain answers on how to create a company-specific M&A playbook. How to outline the process for negotiating deal terms and determining valuation? Fortunately, ChatGPT can make the process much easier.

M&A 130

M&A Consulting Mergers and Acquisitions Valuation 130

Sun Acquisitions

APRIL 24, 2024

In this blog post, we’ll explore the key steps to prepare your business for potential buyers in mergers and acquisitions. You need to understand how much your company is worth, which is essential for setting realistic expectations and negotiating with potential buyers.

Mergers and Acquisitions 52

Mergers and Acquisitions Business Mergers Acquisitions 52

Focus Investment Banking

JUNE 5, 2023

In M&A, working capital is often a significant area of negotiation between the buyer and the seller. It is determined by taking the difference between current assets and current liabilities, which encompasses cash, inventory, accounts receivable (A/R), accounts payable (A/P), and other short-term debt obligations.

M&A 52

M&A Capital Management Mergers and Acquisitions 52

Sun Acquisitions

JULY 21, 2023

In this blog post, we will explore the role of due diligence in successful M&A transactions and why it should be a top priority for companies. It also includes analyzing cash flow, debt obligations, and potential liabilities.

M&A 52

M&A Mergers and Acquisitions Negotiation Mergers 52

Sun Acquisitions

OCTOBER 21, 2024

Mezzanine Financing: Mezzanine financing offers a hybrid form of debt and equity financing that can be used to fund M&A transactions. Mezzanine lenders provide capital in subordinated debt, which ranks below senior debt but above equity in terms of repayment priority.

M&A 59

M&A Finance Finance Business 59

Focus Investment Banking

DECEMBER 5, 2024

The seller’s counsel is responsible for negotiating the key legal terms of the purchase agreement. Using an experienced M&A attorney is critical to move the transaction forward while avoiding costly legal fees negotiating on terms that are not critical. The terms of the earn-out can be negotiated with your advisor and buyers.

Business 52

Business Sale Negotiation Investors 52

Sun Acquisitions

SEPTEMBER 9, 2022

People sell business ownership for a variety of reasons: Needing capital to actually start the company; Swapping equity for additional capital to grow the business; Sourcing money to pay down existing liabilities and debts; Raising venture capital to expand into new markets and; Desiring to diversify their own business risk as the sole owner.

Equities 52

Equities Business Broker Investors 52

Sun Acquisitions

FEBRUARY 20, 2024

This blog post will explore the critical aspects of due diligence in seller financing deals and what buyers must know to ensure a successful transaction. Ensure there are no outstanding debts or legal disputes that could affect the transaction or your future ownership.

Finance 52

Finance Finance Financial Statement Business 52

Focus Investment Banking

OCTOBER 30, 2023

You probably couldn't do an ESOP with a small proprietorship because you may not be able to raise the debt involved and there are ongoing expenses to managing an ESOP a business must be able to afford. And by the way, this valuation is always negotiated. But we are negotiating a price just like any other transaction.

Debt 52

Debt Retail Business Private Equity 52

Focus Investment Banking

DECEMBER 19, 2023

“Investment bankers and leveraged buyout investors in the 1980’s adopted EBITDA as a tool for figuring out whether a company had a profitability needed to service the debt that would need to be taken on to buy the company.” It reflects a company's capacity to reinvest in its business, repay debt and reward shareholders over the long haul.

Debt 52

Debt Profitability Investment Retail 52

Sun Acquisitions

OCTOBER 25, 2022

You can negotiate to retain your salary and benefits throughout the transition. The VC/PE will also want to see a competent management team and request that the company have a sizeable asset base to expedite debt financing before proceeding. The business is plunged into debt. There are no big payouts at closing.

Business 52

Business Broker Finance Finance 52

Sun Acquisitions

NOVEMBER 29, 2022

This can be done by paying off as many outstanding debts as possible, renegotiating terms for business loans, securing new clients, and getting your receivables paid up. This way, you’ll be able to fully justify your asking price and walk away knowing that you negotiated from an informed point of view. Client base.

Business 52

Business Valuation Broker Book-building 52

Focus Investment Banking

SEPTEMBER 3, 2024

You should assume that the company is free of cash and third-party debt. Upon gathering the LOIs, with our guidance, the client decides which buyers we are going to negotiate with to find the ultimate buyer with the most acceptable LOI. This article was previously published on Modern Tire Dealer.

Sale 52

Sale Business Negotiation Valuation 52

Sun Acquisitions

MAY 15, 2023

Consider Various Factors During Valuation: Various factors should be considered, such as cash flow, debt levels, earnings history, and growth prospects. Market-based valuations compare the target company to similar businesses and use market trends to estimate value.

Valuation 52

Valuation Business M&A Debt 52

Lake Country Advisors

JUNE 20, 2024

In this blog, we will learn about the importance of due diligence and explore tips to do it right before your business sale. Buyers must know what they’re getting into and the hidden problems that may derail negotiations. Here are some of its examples: Outstanding debts and obligations. Outstanding debts and obligations.

Sale 52

Sale Business IT Utilities 52

Focus Investment Banking

SEPTEMBER 4, 2024

are all on the table to be negotiated. Lower borrowing costs will make debt-financed acquisitions more attractive, further driving the consolidation of the industry. It’s important for owner/operators that are potentially looking to take advantage of consolidation to know that timing, financial health, and preparation matter.

Business 52

Business M&A Private Equity Investors 52

Cooley M&A

MAY 11, 2020

We have seen this exclusion receive increased attention in ongoing negotiations, but expect it to become commonplace consistent with the prevailing theory underlying MAE definitions that exogenous factors generally should not count toward a material adverse effect (except to the extent they disproportionately affect the relevant company).

Mergers and Acquisitions 40

Mergers and Acquisitions M&A Finance Finance 40

GillAgency

FEBRUARY 10, 2022

They may exclude some assets and/or liabilities based on mutual negotiations. For example, a buyer may not assume a debt or take over a piece of real estate. Remember, everything is negotiable up to the point of accepting or rejecting the deal. In this case you will finance a portion of the sale based on mutual agreements.

Business 52

Business Sale Broker IT 52

Focus Investment Banking

MAY 3, 2024

With higher interest rates, the same cash flow of years past now supports a lower amount of balance sheet debt. Also buyers like to use mezzanine and senior bank debt. The equity check writer will walk away in these cases because they can’t make the return on equity that they seek without the debt. Next, 12.8%

M&A 52

M&A Middle Market Private Equity Debt 52

Cooley M&A

JANUARY 25, 2023

While direct lenders have historically struggled to compete with the syndicated lending market on price and covenant packages, as the year progressed, sponsors increasingly spurned the syndicated lending market in favor of debt packages arranged solely by direct lenders.

M&A 52

M&A Mergers and Acquisitions Private Equity Mergers 52

Sun Acquisitions

FEBRUARY 14, 2025

In this blog post, we will explore key strategies for identifying strategic acquisitions and navigating the M&A process successfully. Assess the target company’s financial performance, including revenue growth, profitability, debt levels, and cash flow. Assessing Cultural Fit Cultural fit is often overlooked in M&A deals.

Acquisitions 71

Acquisitions Business Mergers and Acquisitions M&A 71

Cooley M&A

MARCH 17, 2020

M&A Negotiations and Deal Terms. Highlighted below are some of the key areas where we expect to see more nuanced negotiations and heightened scrutiny during the course of an M&A transaction as a result of COVID-19’s impact: Purchase Price Adjustments/Valuation.

Negotiation 40

Negotiation M&A Stock Insurance 40