Mergers & Acquisitions

A structured discussion around the business need.

One of the most common ways to grow a business or enter the entrepreneurship world is by acquisition. Financing of these types of transactions are critical to the ultimate success of these integrations. At Shaffer Capital we can help you focus on the purchase or sale of your company without having to place any energy on the financing. Many entrepreneurs focus so much energy on the negotiations, financing and related aspects of a merger or acquisition, that they lose sight of the real objective—their current operations. Thus, reducing profits and the overall value of their business. Jacob Shaffer is a highly seasoned financing specialist who can facilitate the proper financing from A to Z, optimizing value at all points.

At Shaffer Capital we can help you focus on the purchase or sale of your company without having to place any energy on the financing. Many entrepreneurs focus so much energy on the negotiations, financing and related aspects of a merger or acquisition, that they lose sight of the real objective—their current operations. Thus, reducing profits and the overall value of their business. Jacob Shaffer is a highly seasoned financing specialist who can facilitate the proper financing from A to Z, optimizing value at all points.

Buying a business, or buying out a partner, usually fails on structure rather than price. The question is how much of the purchase can be funded up front, what the vendor is asked to carry, and what the repayment does to cash flow in the first two years while the business is still settling.

On a $5,500,000 management buyout of the remaining 50% of a service company, the structure funded 100% of the purchase: a fixed-rate term loan amortised over 10 years, with 20% repayable annually without penalty, plus a line of credit at prime + 0.50% for day-to-day operations. Paying the full price up front removed the balance of sale and bought a reduction in the purchase price. The file funded in 45 days.

Public financing options

Terms and availability depend on the business, transaction, and lender. Publicly described considerations in this area include:

It helps to know the purchase price, what the vendor expects to carry, and whether the target is being valued on historic or forward cash flow. It can also identify the people to involve, the matters requiring validation, and the order of next steps so the discussion remains useful to both the business and the lender.