Has anyone done an LBO or all debt deal with no equity?

by a searcher

4 years ago

In the case of a target with high FCF and high debt service coverage with very attractive EBITDA multiples, an all debt deal seems the way to go, but am having trouble with capital structure. Am seeking Mezz Debt to cover 30% of TEV or some alternative.  What would you do?

9 likes
351 views
19 comments

searcher from INSEAD

I can confirm its doable - my target 2, despite been small 50% ABL, 50% seller financed = 100% debt

1 year ago | like reply | 0 likes

intermediary from Harvard University

AJ - I live and breathe in fully levered LBOs (ESOP World). At the end of the day you are most likely going to need some friendly capital at the bottom of the stack to ensure cash flow / reduce risk. In my experience, that generally comes in the form of seller financing. Not always an option depending upon motivation of seller, but seller debt offers you ability to hit desired purchase price without raising incremental capital, albeit less cash at close

4 years ago | like reply | 1 like

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

Self Funded Acquisition: A few Things I Learned

What are market terms for Seller Notes?

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.