There are many factors to consider when evaluating a potential acquisition: strategic fit, product/service overlap, geography, and human capital, to name a few, but perhaps most important is the decision as to how to fund the purchase.  If the acquisition is being funded exclusively with cash on hand or company stock/equity, integrating and managing a third-party capital provider isn’t a key transaction consideration.  However, if the acquisition is being financed with debt, the buyer should certainly want to be aware of all their financing options.

Many business owners and executives are quite comfortable analyzing aspects of their own industries when identifying and moving forward with selected acquisitions, but they can be decidedly less informed as to the different options, structures, and capital sources when it comes to the financing side.  When contemplating a potential acquisition, companies should consider using an advisor who can provide comprehensive buyside advisory services or one who can assist with raising the acquisition capital.  Typical buyside services include:

  • Industry analysis and target searches
  • Valuation assessment of target
  • Preparation and review of acquisition offer(s)
  • Negotiation with seller and their advisors
  • Transaction document review and/or
  • Raise acquisition financing and negotiating with capital providers

At ButcherJoseph, we regularly advise CEOs/CFOs, family offices & independent sponsors with investment platforms, and small private equity firms regarding their financing options and raising capital.  Since 2011, we have raised over $3B in senior and subordinated debt and maintain long-standing institutional lender/buy-side relationships. The robust volume of recapitalizations and refinancings we lead for our clients allows us to navigate complex financing situations or to assist in instances when your existing banking relationship perhaps falls short.  Above all, with our experience and rich connectivity within the lender universe, we can supplement your existing corporate finance capabilities to secure a financing solution at terms that are most optimal for your company.

How do you know if it’s the right time to acquire or raise debt?

Many firms rely on internal forecasting to properly time their investments. Yet, internal forecasts may have an unintentional bias, including the feeling of optimism not based on current or projected economic conditions. This can result in a buyer who might be unpleasantly surprised after the deal closes, realizing the investment was made during the wrong Business Cycle Phase. Having a solid, unbiased three-year forecast of your EBITDA or revenue will greatly enhance your cash flow projection and ROI calculations. ITR Economics has a proven track record of providing company forecasts. While working with ButcherJoseph will help you understand your financing options, partnering with ITR Economics will help you better understand when to execute the plans that will most assuredly increase your ROI.  Furthermore, if the acquisition target provides a related or adjacent service or is in a related or expanded industry end market, ITR can offer even greater value as they have knowledge across a variety of industries and a deep understanding of the macro economic forces at play.   

To further see how our teams can support you during your investment journey, here is a quick video from ITR Economics’ CEO, Brian Beaulieu. 

If you are interested in learning more about how ButcherJospeh can help you with your buyside advisory or financing needs, fill out our contact us form or reach out to me directly at david.lake@butcherjoseph.com or at 314-720-6385.

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