Art of M&A: Financing and Refinancing by Alexandra Reed-Lajoux, J. Fred Weston

By Alexandra Reed-Lajoux, J. Fred Weston

"M&A financing and refinancing could be a route to progressÑstarting this present day, as you learn the information during this e-book and dream up your own." --Alex Sheshunoff, From the Foreword. the growth of a enterprise via merger or acquisition includes adventure. knowledge. the facility to ascertain how or extra mixed businesses can equivalent way over the sum in their elements. It additionally includes, typically, using "other people's money." THE paintings OF M&A FINANCING AND REFINANCING tells you the way to procure and pay off that money, taking the complicated, technical points of M&A finance and making them transparent, comprehensible, and appropriate for your state of affairs. This complete reference guide issues you to all of the proof, figures, names, and areas you must finance your subsequent deal. certain in that it concentrates completely at the such a lot primary part of the M&A transactionÑmoneyÑ THE paintings OF M&A FINANCING AND REFINANCING offers clear-headed suggestion and tips on: the foremost monetary resources and tools you could useÑfor any type of deal; easy methods to decide on the main acceptable form of financingÑdebt, fairness, or a mixture of the 2; Financing through debtÑloans, bonds, and leasesÑand the just about limitless how you can borrow or lend; strategies to contemplate in contracts, together with contingent funds, earn-outs, and fairness kickers; the right way to ensure whilst refinancing is necessaryÑand plan for it as a chance; How unstable international occasions have an effect on monetary systemsÑand the influence this has on M&A financing and refinancing; Debt/equity hybrids and the cars during which they travelÑincluding mezzanine financing and vendor takeback financing. the facility of 1 corporation to procure one other has helped businesses all through heritage develop improved, extra brilliant, and extra aggressive. simply as what you are promoting needs to determine fulfilling relationships with exterior proprietors and providers for its part components and providers, it also needs to develop into acquainted with utilizing exterior financing for development. permit THE artwork OF M&A FINANCING AND REFINANCING assist you mix the "Main highway" of business banking with the "Wall road" of funding banking, and assist you remain at the ecocnomic facet of the M&A good fortune ledger.

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Art of M&A: Financing and Refinancing

"M&A financing and refinancing could be a route to progressÑstarting this day, as you learn the guidelines during this e-book and dream up your personal. " --Alex Sheshunoff, From the Foreword. the growth of a enterprise via merger or acquisition includes adventure. knowledge. the power to examine how or extra mixed businesses can equivalent excess of the sum in their elements.

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Thus, finding present values (or discounting, as it is commonly called) is simply the reverse of finding the future value. You can calculate the present value by multiplying the future value by 1/(1 + r)—where r is the market rate—or alternatively dividing by 1+ r. This also gives you two numbers to compare: a present value of $1,100 for the transactional investment discounting back from the future versus $1,000 "in hand" today. Comparing the future and present value numbers for the two investments, you can see that the relationships are equivalent.

D5. 10. This list is based on the categories used by Securities Data Publishing in its annual Directory of Buyout Financing Sources (New York, 1999). Subcategories and hybrids of these 10 basic types include: asset-based lending company, nonbank commercial lender, conduit for receivables securitization, debt/equity sourcing company, equipment leasing and finance company, intermediary for private investors, employee stock ownership plan (ESOP) financing, investment manager, investment/money management firm, intermediary, M&A intermediary, manager of corporate development programs, manager of third-party minority stakes, mezzanine firm, LBO/equity fund (same as private buyout), mezzanine investor, seed money investor, turnaround specialist, and venture leasing firm.

In a n y event, unless a n e w c o m p a n y h a s been formed for the specific p u r p o s e of being a pass-through entity to u s e in a merger or acquisition (see Chapter 3), it is unlikely to b e seeking financing to buy another company. High-growth companies tend to u s e a c o m b i n a t i o n of internal f i n a n c i n g and trade credit, commercial b a n k loans, a n d v e n t u r e capital investments. Because of their accumulating assets, they m a y b e c a n d i d a t e s for asset-based lenders and commercial finance c o m p a n i e s as well.

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