Mergers & Acquisitions: the importance of successful financing
Mergers and acquisitions (M&A), management buy-outs (MBO), company sales or buy-outs represent decisive moments in the life of a company. These transactions require not only a clear strategy, but above all solid financing to ensure their success. In a competitive market, a well-structured financial package helps create value, ensure business continuity and make the most of leverage and self-financing.
Complex operations requiring expertise
Whether it's an entrepreneur wishing to transfer his business, a management buy-out where the management team buys out the company, or a merger to strengthen a market position, each operation involves considerable financial risks and stakes. Success depends on the ability to secure the necessary funds within the given timeframe, while preserving the company's flexibility and competitiveness.
The central role of financing
Well-designed financing does more than just cover the purchase price. It must also take into account :
- The structure of equity and debt,
- Repayment capacity based on EBITDA and cash flow,
- Tax and legal optimization,
- The balance between leverage and self-financing.
As studies of Swiss SMEs have shown, access to credit remains a key success factor, even if banks tend to require substantial collateral. In addition, careful preparation of the business case, with clear financial statements, a robust business plan and a precise assessment of expected synergies, is decisive in convincing financial partners.
Leverage and self-financing
In M&A and MBO transactions, leverage maximizes the return on equity, provided that debt remains sustainable. At the same time, self-financing (cash flow from operations) remains an essential source of stability, since it reduces dependence on capital markets and banks. Successful financing packages intelligently combine these two approaches, taking into account the cyclical nature of the sector and future margins.
The risk of ill-prepared financing
Conversely, insufficient or ill-calibrated financing can leave a company vulnerable to overindebtedness, lack of liquidity, restrictive contractual clauses or excessive dependence on a single banking partner. Securing financing with collateral, often perceived as a guarantee, does not eliminate all risks, and can even exacerbate difficulties in the event of a liquidity crisis.
PrestaFlex's added value
For over ten years, PrestaFlex has been helping companies to structure complex financing:
- Bridge financing to secure a transaction,
- Mezzanine and hybrid financing to complement equity capital,
- Leaseback and factoring to strengthen cash flow,
- Private equity and specialized investors for external growth operations.
Our role is to defend our customers' interests, anticipate risks and present sound business cases to investors and financial partners. Thanks to our national and European network, we can provide rapid, discreet solutions tailored to each operation.
Well-thought-out financing is not just a technical requirement, it is at the heart of a successful merger or acquisition. At PrestaFlex, we make it a priority to ensure the sustainability and growth of our customers.
An article by Munur Aslan, Director of PrestaFlex
