The Art of M&A Financing and Refinancing

"M&A financing is money obtained by one company to buy or join another in a merger, acquisition, or buyout."

"To determine the amount of financing needed to buy another company, three questions will be paramount."

"The replacement value method is the simplest but the most tedious of the valuation processes."

"The purchaser should attempt to minimize the tax costs of the transaction to the seller in order to gain advantage as a bidder."

"Corporate borrowers often use more than one type of debt."

"Stock is a fairly common acquisition currency."

"The borrower usually does not feel the effects of the securitization."

"All the basic sources of external financing can provide debt-based financing, whether cash, bonds, or notes."

"Most new companies need to reach out to a special form of financing called venture capital."

"Backers provide financing to private companies or to public companies going private."

"The strategic reason for buying a company, the price actually paid, and the general ability of the company to support the price?all these can affect postmerger performance. "

"Although sometimes only one lender is needed, multiple tiers of lenders are normally necessary for large transactions."

"In a company that is being considered as an acquisition candidate, this debt is likely to appear in any of at least four forms."

"The "purely" domestic deal?involving two companies located entirely in the same country and financed entirely by local sources?is becoming an anachronism. "

"Even without government encouragement, commercial banks and other financial institutions are willing to loan money to companies acquiring abroad."

"The question of whether a particular entity should be classified as a corporation or a pass-through entity for U.S. income tax purposes matters greatly in any deal, but its importance is even greater in the international context."