So, what is acquisition financing?
Acquisition financing is the way in which a company funds a merger or a company acquisition.
How do companies finance acquisitions?
They do it through various types of capital. In fact, larger companies and deals might leverage more than one method of financing using acquisition loans.
How does acquisition financing work?
Smaller companies can reap multiple benefits from acquiring other companies, such as business synergies and economies of scale. In order to acquire another company, the buy-side must review different business acquisition financing options. If you are acquiring company businesses as part of expansion plans then its a good idea to shop around for acquisition funding.
What is a business acquisition loan?
A business acquisition loan is a loan given to a company for the specific purpose of acquiring another company or asset; it is a common way of financing an acquisition. There are often restrictions that accompany these loans, such as time limits. The lender also determines the amount of the loan and who is eligible for the loan.
Platinum Global Bridging Finance work with alternative lenders, providing debt solutions for international mergers and acquisitions to UK and European companies who are unable to access the mainstream banking market for some or all of their capital requirements. We help companies looking to finance mergers and acquisitions or straight forward business acquisition.
Our simplistic approach and lending strategy means we are able to provide supportive and flexible capital, delivered by an experienced team of specialists much quicker than standard banks.
From £500k to £30m+ (EUR 500km to 35m+) to 5 years available for UK companies involved in strategic development. Debt financing is either secured via property or other unencumbered assets or cashflow-based on an EBITDA multiple. Business acquisition financing, management buyout funding (MBO finance) or company recapitalisation is usually via senior debt finance with a first charge over property, financial assets and the business itself. The acquiring party or management buyout team will need to contribute financially to the deal.
Whether a simple refinance or transformational capital, the Finance team understands what you and your company are going through, and will partner with you through that journey:
- Growth Finance / Acquisitions
- Refinancings / Change of control
- Turnarounds / Special situations
Speed Of Execution
Quick decision-making process and ability to deploy capital fast
Our lenders invest in opportunities rather than specific sectors
Our lenders Finance team operates a flat structure, which means you are in contact with a key decision maker from day one. We strongly believe in the importance of relationships, so the same team will stay with you through the life of the loan
Our lenders can provide a complete solution for companies, but where required we can work closely with the mainstream banking and ABL community to provide a hybrid solution
Our Financing lenders offers bespoke and differentiated funding solutions:
£2m to £30m+ (EUR 3m to 35m+)
- Asset focus with recognition for sustainable operational cash flow
- Leverage all asset classes including: Property, Plant & Machinery, Inventory, Receivables and Brand
- Flexibility to lend across the capital structure, including senior, second lien, unitranche and asset carve outs
- Offering a range of commitments from 6 month bridge loans to five year term loans
- Our lenders consider funding businesses in the UK and across Europe, in selected jurisdictions
Companies, like yours, typically complete acquisitions with the goal of growing and responding to your customers’ needs more quickly. Through acquisitions, you can also access adjacent markets as well as diversify your customer base.
There are various alternatives for financing an acquisition financing, depending on the acquiring company’s situation and goals, and the business acquisition finance structure can include a mix of funding sources. The most common alternatives for financing an acquisition include swapping stocks, cash, senior debt financing, mezzanine financing, leveraged buyouts, or equity.
We have experience working with companies of all sizes (EBITDA of £8 million to sky’s-the-limit) from a range of industries to implement a customised acquisition financing solution that meets the objectives of management teams.
Acquisition Finance Typical Uses
- Middle-market companies with attractive growth prospects and positive cash flow
- Incumbent management teams and active ownership with an economic stake in the company’s success
- Minimum EBITDA of £8 million
- Generalist sector approach
Typical Size For Acquisition Finance
- Senior debt: £10 million – £300 million
- Subordinated debt: £10 million – £100 million
Acquisition Finance Structural Characteristics
- Senior debt, alongside junior capital, for a seamless, one-stop solution with a single, relationship-oriented capital provider
- Typical maturities: 3 – 25+ years
- Flexible payment structures, including amortising or bullet, and fixed- or floating-rate
Issuer benefits of Acquisition Finance
- Capacity to fund across your capital structure; a one-stop shop with senior debt, mezzanine or subordinated debt, and preferred equity
- Supportive, patient, relationship-oriented partner
- Deep pockets to provide follow-on capital to fund your future growth
- Industry agnostic, with deep experience financing manufacturing, service, and distribution businesses
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