Mezzanine Financing: Tools, Applications and Total Performance

Case Guidance/Solutions

The case studies included in this book were predominantly included to facilitate understanding of the theory discussed in the respective chapters and to accommodate enhanced understanding of some of the practicalities and technicalities that surround the implementation of mezzanine products in different types of situations and settings. Given that perspective, the analysis of the issues is more important than the answers to the questions posed at the end of the cases. Nevertheless, it might help some readers to have some level of direction provided when navigating through the cases or as an after-read. The following feedback on (most of) the cases will try to do exactly that. I have tried to make the feedback more exploratory and orientation-based rather than prescriptive in nature. That makes sense, as most mezzanine deals are negotiated solutions. Therefore, there are no real answers, and clearly not one correct answer, but merely more optimal and less optimal outcomes given the complexities and technicalities of a certain case. That understanding was observed when drafting the following guidance on the cases.

KRATOS ACQUISITION FINANCE

The central question in this case relates to the financing of the acquisition by Kratos of the Odin company. However, to understand the intrinsic risk in the acquisition we need to have a closer look at the industry, the expected synergies etc. before looking at the financing question.

The bearings industry is essentially ...