Category: Financing & buyouts
How deals are funded, including debt-financed acquisitions and private equity buyouts.
11 articles in this category.
- Dividend recapitalisation — A specific form of leveraged recap in which the proceeds are paid out as a dividend to equity holders. Most common in private-equity portfolio companies seeking interim returns.
- Entrepreneurship through acquisition — The category of transactions in which an individual entrepreneur acquires an existing operating business — most commonly via a search fund, self-funded search or SBA-financed deal.
- Leveraged buyout — An acquisition financed largely with borrowed money, repaid from the target’s cash flows.
- Leveraged recapitalisation — A transaction in which a company borrows substantial debt and uses the proceeds to repurchase shares or pay a special dividend, increasing leverage and (often) returning capital to owners.
- Management buy-in — An acquisition by an external management team that intends to take operating control of the target after closing. Distinct from an MBO in that the buyers are not the incumbents.
- Management buyout — A transaction in which the existing management team acquires the company they run, typically with private-equity or debt financing. Common in PE secondaries and family-business succession.
- Mezzanine debt — Subordinated debt with equity features such as warrants or PIK interest. Sits between senior debt and equity in the capital structure, with correspondingly higher cost.
- SBA acquisition financing — U.S. Small Business Administration-guaranteed loans, particularly the SBA 7(a) program, used to finance acquisitions of small businesses up to roughly $5M in total project size.
- Search fund — An entrepreneurial vehicle in which one or two operators raise modest investor capital to search for, acquire and operate a single small or lower-mid-market company.
- Seller financing — A note from the buyer to the seller for a portion of the purchase price, typically subordinated to senior debt. Common in lower-mid-market and main-street deals as a bridge between buyer cash and bank financing.
- Unitranche — A single debt instrument that combines senior and subordinated tranches in one document at a blended rate, increasingly used in mid-market LBOs in lieu of separate credit facilities.