Filed under: acquisition company
At a recent UNYMAC event we held a panel discussion about closing deals. Near consensus emerged on the need to use creative ways to solve the funding gap. This funding gap is the difference between the price to be paid for a business and the amount of capital that can be raised. Seller paper and other contingent forms of payment are being used now more than ever.
The key to raising actcapital.com/acquisition_financing.html” target=”_self”>acquisition financing in this market is to understand what deal structures are working. For businesses seeking acquisitions, a structure consisting of senior debt, mezzanine debt and some seller retained equity or seller paper are working. In some instances, a combination of mezzanine debt and seller paper can work as well.
The goal for a business is to strike the right balance between acquisition price and capital flexibility. Too much senior debt can choke off your cash flow with the need to pay back too much principal too soon. Too much mezzanine debt can be expensive unless the mezzanine debt is replacing ultra expensive private equity.
There are a lot of acquisition targets in the market right now and even opportunities for distressed acquisitions. Finding the right capital structure to finance the right acquisition is absolutely critical. We help our clients do both. We help them get the best valuation and achieve the best way to fund the acquisitions.
About Attract Capital
Attract Capital, LLC is an advisory firm that achieves acquisition financing success for its clients. We help ambitious companies realize their growth dreams. We are deal making experts with over 20 years of acquisition financing experience.
At Attract Capital, we are experts at figuring out the best financing structure for your acquisition financing need. Our structures are proactively designed and customized. We create value for our clients by designing structures that require capital providers to meet our needs vs. their needs.
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David Barnitt,
16 Brandywine Drive
Setauket, New York 11733