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The operations of mergers and acquisitions (M&A) are among the most powerful strategies to accelerate a company’s growth, enter new markets, or quickly gain a competitive edge. To carry out such a project successfully, it is essential to implement financing tailored to the size and objectives of the transaction. At PrestaFlex, we support our clients at every stage of their M&A operation, offering bespoke financing solutions and strategic advice.
1. Key financing considerations in an M&A transaction
- Required financial resources
Mergers and acquisitions can involve substantial sums, whether for purchasing the entire company, a majority stake, or specific assets. The cost varies according to industry, the size of the target, and whether the deal is full or partial. - Risk‐profile analysis
Lenders and investors examine the feasibility of the project and the acquirer’s financial strength, focusing on the company’s ability to service the debt incurred and to maintain profitability post‐transaction. - Varied financing structures
Possible instruments include bank debt, bond issuances, private equity, and mezzanine financing. Each has its own advantages and drawbacks, which must be weighed against the buyer’s and target’s specific circumstances.
2. Main forms of financing
- Traditional bank financing
Medium‐ to long‐term loans secured by the company’s assets. This solution is often the simplest to arrange but requires a strong financial track record and solid repayment capacity. - Mezzanine financing
Positioned between senior debt (bank loans) and equity, with higher interest rates. It offers more flexibility than traditional debt and can help preserve cash or assets for other initiatives. - Private equity
Firms invest directly in the company’s equity. This is attractive for significant capital needs without overburdening the balance sheet with debt, but it brings a new shareholder into the governance process. - Bond issuances
Companies can raise funds by issuing bonds publicly or via private placements. This route suits larger groups with strong credit ratings, as issuance terms depend on the company’s debtworthiness. - Leveraged Buy-Out (LBO)
Common in management‐ or investor‐led acquisitions. It uses debt secured against future cash flows; the debt is repaid from the earnings of the newly combined entity.
3. Key stages of financing an M&A deal
- Due diligence and planning
Conduct an in-depth review of the target, assess risks, and identify potential synergies. PrestaFlex partners with sector experts to validate the transaction’s merits and build a credible financial model. - Determining funding needs
Precisely calculate the total amount required and allocate between equity and external financing. We guide clients through evaluating options and understanding their balance‐sheet impacts. - Selecting the financing structure
Based on project size and buyer profile, PrestaFlex designs the optimal blend of instruments (bank loans, mezzanine, private equity, etc.), balancing cost of capital, flexibility, and financial stability. - Negotiation and closing
We assist clients in negotiating terms with banks, investment funds, and other stakeholders to secure favorable rates, covenants, and collateral. Once agreements are in place, we coordinate fund disbursement and the formal closing. - Post‐acquisition monitoring
After closing, it’s crucial to track the new entity’s performance and comply with any financial covenants. Leveraging our experience, we help establish robust reporting frameworks to ensure long-term success.
4. Why choose PrestaFlex?
- Sector and financial expertise: Our team of finance, legal, and tax specialists understands your industry’s nuances and delivers the best advice.
- Preferred partner network: We maintain strong relationships with banks and investment funds, facilitating access to competitive financing terms.
- Full‐cycle support: From initial analysis through integration, we are by your side to guarantee sustainable growth.
- Tailored solutions: Each financing package is customized to the scale, complexity, and specifics of your transaction, aligned with your priorities and constraints.
Article by Munur Aslan, Director of PrestaFlex
" ["post_title"]=> string(32) "Merger and acquisition financing" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(6) "closed" ["ping_status"]=> string(6) "closed" ["post_password"]=> string(0) "" ["post_name"]=> string(32) "merger-and-acquisition-financing" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2025-05-05 22:23:24" ["post_modified_gmt"]=> string(19) "2025-05-05 20:23:24" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(30) "https://prestaflex.ch/?p=13512" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }The operations of mergers and acquisitions (M&A) are among the most powerful strategies to accelerate a company’s growth, enter new markets, or quickly gain a competitive edge. To carry out such a project successfully, it is essential to implement financing tailored to the size and objectives of the transaction. At PrestaFlex, we support our clients at every stage of their M&A operation, offering bespoke financing solutions and strategic advice.
1. Key financing considerations in an M&A transaction
- Required financial resources
Mergers and acquisitions can involve substantial sums, whether for purchasing the entire company, a majority stake, or specific assets. The cost varies according to industry, the size of the target, and whether the deal is full or partial. - Risk‐profile analysis
Lenders and investors examine the feasibility of the project and the acquirer’s financial strength, focusing on the company’s ability to service the debt incurred and to maintain profitability post‐transaction. - Varied financing structures
Possible instruments include bank debt, bond issuances, private equity, and mezzanine financing. Each has its own advantages and drawbacks, which must be weighed against the buyer’s and target’s specific circumstances.
2. Main forms of financing
- Traditional bank financing
Medium‐ to long‐term loans secured by the company’s assets. This solution is often the simplest to arrange but requires a strong financial track record and solid repayment capacity. - Mezzanine financing
Positioned between senior debt (bank loans) and equity, with higher interest rates. It offers more flexibility than traditional debt and can help preserve cash or assets for other initiatives. - Private equity
Firms invest directly in the company’s equity. This is attractive for significant capital needs without overburdening the balance sheet with debt, but it brings a new shareholder into the governance process. - Bond issuances
Companies can raise funds by issuing bonds publicly or via private placements. This route suits larger groups with strong credit ratings, as issuance terms depend on the company’s debtworthiness. - Leveraged Buy-Out (LBO)
Common in management‐ or investor‐led acquisitions. It uses debt secured against future cash flows; the debt is repaid from the earnings of the newly combined entity.
3. Key stages of financing an M&A deal
- Due diligence and planning
Conduct an in-depth review of the target, assess risks, and identify potential synergies. PrestaFlex partners with sector experts to validate the transaction’s merits and build a credible financial model. - Determining funding needs
Precisely calculate the total amount required and allocate between equity and external financing. We guide clients through evaluating options and understanding their balance‐sheet impacts. - Selecting the financing structure
Based on project size and buyer profile, PrestaFlex designs the optimal blend of instruments (bank loans, mezzanine, private equity, etc.), balancing cost of capital, flexibility, and financial stability. - Negotiation and closing
We assist clients in negotiating terms with banks, investment funds, and other stakeholders to secure favorable rates, covenants, and collateral. Once agreements are in place, we coordinate fund disbursement and the formal closing. - Post‐acquisition monitoring
After closing, it’s crucial to track the new entity’s performance and comply with any financial covenants. Leveraging our experience, we help establish robust reporting frameworks to ensure long-term success.
4. Why choose PrestaFlex?
- Sector and financial expertise: Our team of finance, legal, and tax specialists understands your industry’s nuances and delivers the best advice.
- Preferred partner network: We maintain strong relationships with banks and investment funds, facilitating access to competitive financing terms.
- Full‐cycle support: From initial analysis through integration, we are by your side to guarantee sustainable growth.
- Tailored solutions: Each financing package is customized to the scale, complexity, and specifics of your transaction, aligned with your priorities and constraints.
Article by Munur Aslan, Director of PrestaFlex
Bridge financing