Audax Private Equity (“Audax P.E.”) a control oriented Private Equity fund has acquired Techniks Industries (“Techniks”). Part of the funding for the deal came in the form of a mezzanine loan. Audax P.E.’s focus is to build leading middle market companies through its investment activity. They have invested over $3 billion across 88 platforms and 414 other add on acquisitions. Techniks is a leading provider of industrial tool holders and cutting tools for the North America region. Techniks was previously held by Tenex Capital Management, a private equity firm based out of New York. LBC Credit Partners (“LBC”) provided the mezzanine loan to help complete the deal. LBC is a leading provider of financing solutions to middle market companies.

As the Fed decides to ease interest rates, middle market acquisition financing structures will benefit in a number of ways. The underlying values of middle market companies will increase leading to a higher enterprise value and lower loan to value ratios for existing portfolio companies of acquisition financing lenders.

The role of acquisition financing is infrequently elevated above a functional transactional one. When a business needs financing to acquire, they go to the market and source acquisition financing to supplement their equity investment to close the deal. Despite existing in many different forms, acquisition financing is rarely explained in terms of the value it brings to the acquirer.

Acquisition financing underwriting usually focuses on business and financial issues that underpin the stability of cash flow. Providers of acquisition financing usually validate the durability of a company’s competitive advantage and the depth of its resource base. Environmental issues are usually not a major part of the analysis in today’s service and technology-based economy.

Audax Private Equity acquires Techniks from Tenex Capital Management

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