Acquisition Finance is the use of debt, equity and hybrid financing techniques to achieve an acquisition. The focus of acquisition finance is on identifying the optimal financing solution for a company. This occurs when the cost and flexibility of the financing structure is linked to the company’s cash-flow based value and growth potential.

Acquisition Finance Structures

Optimal acquisition finance structures are adapted to the client situation and may call for nonstandard corporate finance techniques and funding sources.

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.

In the acquisition financing world, there is a lot of publicly available information on different funds and structural approaches which allows a first deal neophyte to get up to speed quickly. After a deep dive online, most deal sponsors can gain a basic understanding of how to do an acquisition financing deal.

Acquisition Finance

Acquisition Finance Structures

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