Suboptimal Processes of Acquisition Financing Lenders

acquisition-financing

Acquisition financing lenders often praise their recent deal closings to show their investment power. The act of closing a deal should be celebrated due to the difficult work involved for all parties, especially the borrower. Often acquisition financing lenders overlook their deal processes which make the financing process more difficult.

The Importance of Timing in Acquisition Financing

acquisition-financing

Acquisition financing deal timelines are often drawn up with great certitude but rarely understood at a deep level. It often seems as if the parties in their eagerness to engage and collaborate, overlook the atomic components that truly regulate the timing flow.  In all deals, timing can make or break the deal.

Acquisition Financing Rules for Neophyte Acquirers

acquisition-financing

There is a changing of the guard in the M&A market given the presence of fund-less and independent sponsors. Acquisition financing providers have expanded their focus to engage with this vibrant new group of buyers. Many of these acquirers are young neophytes who have developed a differentiated investment thesis but lack a long history of experience in the industry they are buying into.

The Inanity of Private Equity Investors

private-equity

In the acquisition financing world, middle market private equity investors are held in high esteem. They are a sought-after relationship by lenders and service providers due to their continual investment activity and fee generation potential. Most people enter the private equity industry via adjacent professions such as big banks, investment banks or consulting firms where they had minor roles in specific deal related workflows such a modelling, PowerPoint creation or industry research.

When Acquisition Financing Lenders Fall Over and Go Thud

acquisition-financing

Scalability is an important feature of an acquisition financing lender, especially for companies that are acquiring rapidly and rolling up an industry. Due to the high volume of acquisitions, it is impossible to finance a roll-up with a new loan or lender for each deal. Acquisition financing facilities in the form of delayed draw term loans and accordion facilities are the norm to allow companies easy access to follow-on acquisition financing.