Acquisition activity is undertaken by businesses to accelerate growth. A strategic acquisition is typically triggered by either economies of scale or economies of scope. Acquisition financing is the capital obtained for the purpose of buying another business.
Different types of acquisition financing methods are undertaken depending upon the business, its valuation and future growth plan. The most common form of acquisition capital involves cash, bank debt, equity exchange (All share deals), a line of credit, mezzanine financing/subordinated debt, venture capital funding and leveraged buyouts (LBOs). Acquisitions (Takeovers) can be classified as friendly, hostile, reverse and back-flip depending upon the structure of the combined entity post-acquisition.
Finding suitable investors is a challenging endeavor when you are looking for capital to finance an acquisition. Negotiating finance and deal terms can be an arduous and time-consuming process. However it can make all the difference in securing your business, and reduces your personal onus and risk as purchaser.
Challenges
- Acquisition financing is a complex process if the deal is not funded by internal cash accruals/reserves
- Maintaining an efficient capital structure that is also tax-efficient, post-acquisition, can be challenging
- Certain geographies impose legal and regulatory restrictions during transactions
- Deals need to be deadline oriented with clearly defined milestones to avoid failure
- Cross border and multi-geography deals involving different currencies require international expertise
Solutions
- Detailed analysis of capital structure, both pre- and -post acquisition, to ensure optimal efficiency
- Extensive experience in structuring complex deals involving quasi-debts, mezzanine finance and other available financial instruments
- Legal advice on regulatory and tax-related issues
- Proven track-record in cross-border multi-currency deals through innovative solutions to meet the acquirer's objectives
- Capable of providing strategic guidance through the entire life-cycle of transactions
Benefits
- End-to-end solutions offered under one-roof
- Access to high-quality advisory and investment banking resources and services
- V4G supports growth strategies of businesses in Europe and beyond
- Tailor made funding to further expand your business
- Personalized attention and commitment to your goals
- Unbiased ad-hoc advice and hands-on extensive entrepreneurial experience
- Wall Street know-how on alternative structures, tax laws and similar transactions
- Access to global financial services and capital partner network
- Transparency, on-going communication, trust and discretion
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