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SMEs’ growth strategies vary, but an acquisition can be a very attractive option for scaling up a business. Through our loans, we offer £2 million to £8 million of acquisition finance to growing and innovative businesses. If you are considering an acquisition, come and talk to us about the funding we could offer.
We judge every potential acquisition financing opportunity on its merits, but the factors we will consider when looking at your deal are the following:
– management team experience, both in running companies of a similar size and in your industry;
– the business’s ability to service the debt;
– the debt to equity ratio following the deal.
We provide funding to support a number of different types of acquisition:
One business buys another with the aim of building a stronger combined operation — an enhanced market position or cost and revenue synergies for example.
We prefer buy and build deals better when:
– the size of your business is bigger or equal relative to the business to be acquired;
– the potential for cost and revenue synergies is clear — cost synergies tend to be simpler to realise;
– management team has experience in combining different businesses.
Current management team raises funds to purchase the business, which they then continue to run.
We like these because management team already has in-depth knowledge of the business and its industry.
Buy-In Management Buy-Outs are similar to MBOs, but also involve management from outside of the company joining the management team.
We will consider the experience and expertise of the new managers entering the business.
A new management team from outside the company raises funds to purchase the business, which they will then run. These deals are riskier, as the new management team will not know the business as well as an existing management.
We expect that the new management team:
– invest significant funding of their own in the business;
– have successfully completed such transactions in the past;
– have expertise and experience in the industry.