Financing a $30 Million Dollar Acquisition

August 10, 2022

by a searcher in Atlanta, GA, USA

An opportunity came up through a family friend to purchase their business for $30 million dollars. How would you all recommend financing a deal of this size? Some stats about the deal below.

Purchase price: $30 million (5x EBITDA)
EBITDA: $6 million
Seller is willing to roll 30% equity + a 20% sellers note
I am not in the position to inject a significant amount of equity into the deal.

All input appreciated.

1 Like

6 Replies

126 Views

Replies

Reply by a professional
from University of Akron in Charlotte, NC, USA

We work with clients on the buy-side and have access to a large investor group (nearly 1k) that would be ideal for this transaction. They review deals up to $100 mm and will go higher with more a more detailed proposal. Each investor is well-funded and they all review the deal separately. It's not 1 investment decision but rather each individual investor decides independently whether they want to fund the transaction so just this one network we work with would expose your deal to nearly 1k active investors (60% of the deals on average are getting funded). Typically, they can fund 100% of the deal for 10-30% equity or they can structure their investment as debt as well. you can reach me at redacted if you want to learn more.

Reply by a searcher
from Butler University in Indianapolis, IN, USA

As a former commercial lender I would start with the companies existing banking relationship. They will likely be very interested in helping you find a way to get this deal done and will want to keep an existing relationship. The amount and structure of the debt will largely be determined by the quality of the cash flow and the assets of the company. I would then take a few more meetings with competing banks to help negotiate the best deal. You can probably get a limited or no recourse loan if the company is well established and there are assets to back it up.

+4 more replies.

Join the discussion