Tennenbaum Capital Partners provided Soundcloud, the music sharing website, with $35 million in debt funding. Soundcloud was also given the option to borrow another $70 million through convertible bonds, if necessary. Tennenbaum Capital Partners is an American alternative investment firm that specializes in both performing credit and special situations. Previously, Soundcloud received $60 million Series D round funding from Index Venture Partners and Chernin Group at a $700 million valuation. This investment came in January of 2014. Soundcloud had a very strong user base and has recently pursued several different growth options which look to increase the company’s revenue.

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.

Tennenbaum Capital Partners provides $35 Million to Soundcloud

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