Chapter 4
Financing M&A Deals
IN THIS CHAPTER
Getting a handle on financing and debt basics
Tuning in to types of investors and deals
Digging into EBITDA
Covering Buyers’ return metrics
Working out a deal on a troubled company
Before discussions between Buyer and Seller heat up — and possibly burn out due to lack of planning — Buyers need to line up their financing for acquisitions, and Sellers should ascertain Buyers’ ability to actually come up with the dough.
In this chapter I explore the various methods that help Buyers finance the acquisition of companies, including where Buyers get the necessary capital, what exactly they’re buying, and what those transactions look like.
Exploring Financing Options
To many, buying a company means an exchange of cash: Seller gets some dough, and Buyer gets the company. This transaction implicitly states that the payment is currency, to be paid now, and the price is fixed. Although that’s one way to finance a deal, it’s not the be-all and end-all ...
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