THE FINANCING QUESTION
When this becomes relevant.
Start with the business circumstance, rather than choosing a product in advance.
- A buyer is acquiring an established operating company.
- A management team is evaluating an ownership buyout or succession transaction.
- An existing company is purchasing a complementary business or productive assets.
- The proposed structure includes seller financing, equipment debt or a working-capital component.
THE ASSESSMENT
What we examine.
These considerations shape the financing discussion and the information required for a meaningful review.
| Review area | What matters |
|---|---|
| Target performance | Historical and current earnings, normalization support, concentration and recurring operating requirements. |
| Buyer resources | Experience, equity contribution, liquidity, management continuity and integration capacity. |
| Sources & uses | Purchase price, debt repayment, transaction costs, working capital and post-closing investment. |
THE STRUCTURING PERSPECTIVE
A plan that fits the situation.
A transaction can require more than one financing component. The purchase facility, asset financing and operating line must be compatible. We consider the combined debt burden and the post-acquisition cash position, rather than assessing each component in isolation.
TRANSACTION READINESS
What to prepare.
Begin with a concise overview. Detailed and sensitive records follow through an agreed delivery method.
- LOI or purchase agreement, transaction structure and ownership information.
- Target financial statements, tax returns, debt schedule and proposed adjustments.
- Buyer background, equity evidence, transition plan and projected combined cash flow.
The document list is indicative. The agreed service role, lender requirements and transaction circumstances determine the final package.