Financing for Transaction with Meaningful Seller Note & Rolled Equity

by a searcher

4 years ago

We have received seller approval and are contemplating a transaction for a company with a long history and stable financials. The seller wishes to remain with the company post-transaction, will roll a significant portion of equity, provide seller financing for a meaningful portion of the deal, and provide long term mentorship/training to the new management team for a seamless transition. The contemplated deal has the following characteristics:

•	Purchase price of 5x Pro Forma EBITDA (inclusive of new management salaries)

•	Proposed Debt
o	   SEEKING FINANCING for 50% of the transaction with a 7-10 year term
o	   Seller is willing to finance 26% of transaction with 10-year term

•	Equity (24% of total transaction)
o	   Seller will roll 70% equity
o	   Buyer contributes 30% of equity, with management options of 30% 

Does anyone know of a lender/group that would be interested in a pursuing such a structure?

3 likes
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2 comments

searcher from University of Pennsylvania - The Wharton School

If you would like to send a message, I may have a solution for you depending on the details.

4 years ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

I have seem lenders extend the financing under your proposal. As a investment bank advisor, we have secured private debt financing above 50%. The final structure to your proposal and question lies in the next level of detail and the lender agreeing with you.

4 years ago | like reply | 0 likes

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