Acquisition Financing Strategy

professional profile

November 16, 2022

by a professional in Los Angeles, CA, USA

If you are in the market to buy a business that includes Real Estate then a sale and leaseback analysis can be an invaluable tool to simultaneously acquire the business and sell off the real estate at roughly 1.5x to 2x the appraised value while entering into a long term business favorable lease and having full control of the real estate. We have worked with hundreds of businesses around he country that were able to acquire the business with zero to minimal equity and having the sale and leaseback model finance the acquisition. Please PM me with any questions and to obtain an analysis (at no cost).

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Reply by a searcher
from University of Cambridge in Miami, FL, USA
Ive worked on several SLBs (buy side) here in the UK. As far as leveraging it in an acquisition finance context, the strategy can be particularly useful for franchised QSR acquisitions. Cap rates for NNN SLBs to strong QSR covenants tend to be more attractive than those for independent businesses (all things equal).

Theres a good case study written a few years ago on two searchers who successfully leveraged this exact strategy to roll up Burger King franchises.
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Reply by a searcher
from University of Cambridge in Miami, FL, USA
The case study is on Cambridge Franchise Partners, available here: https://www.hbs.edu/faculty/Pages/item.aspx?num=58088.

Given that his book is being advertised on this website (just purchased!), I have to give credit to Jan Simon for introducing me to this case during his financing entreprenuial acquisitions course last year.
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