The private debt industry has matured and expanded over the past 10 years, making it a huge force to be reckoned in 2025 in the acquisition financing market. It has become the go-to source for founder-owned companies and independent sponsors due to its attractiveness over banks. While many still go to banks to fund their deals, there are several underlying reasons why private credit fund platforms are intrinsically superior to banks in providing acquisition financing.
There is tremendous creativity in the deal world with opportunistic acquirers in need of acquisition financing. The US economy has created an M&A market of such breadth and depth that many young acquirers try their hand at acquiring without having any capital of their own to invest. While this may sound insane to some, the rise of a sizable new class of acquirers over the past 10 years – fund less sponsors- suggests otherwise.
Wall Street Pros are renowned for eagle-eyed vision on key deal points with acquisition financing. Whether on the investment banking side or the private equity side, they boil term sheets down to a list of things that matter and fight aggressively over those points. Their focus is informed by years of experience seeing a vast number of deals perform over a variety of different assumptions.
Acquisition financing permits rapid scaling of size, product line, talent pool and market reach in one fell swoop, compressing several years of organic growth. This is very helpful to companies that compete in industries subject to rapid growth or change. It gives companies a durable competitive edge and creates a wider moat of specialization that is challenging for competitors to navigate.
Acquisition financing is capital used by any type of middle market buyer to acquire another business. Acquisition financing supports all forms of deal types and strategic growth scenarios. The most common acquisition financing deals are founder-owned companies and independent sponsors buying a company. These buyers need access to a large lender universe and a clear financing roadmap to navigate the lender process.