Ever wonder how some companies manage to acquire a company, but don’t make it easy for others?
When we talk about financial acquisitions, mezzanine financing is often the key. Mezzanine financing allows companies to finance the acquisition of other businesses in a way that protects them and provides better value for shareholders. It also enables them to buy multiple targets simultaneously and allows them access to target sectors they might not be able to otherwise reach through other methods.
However, mezzanine or quasi-debt is an integrated form of financing that includes both equity and debt features. It usually comes with an option of being converted to equity. Mezzanine financing is suitable for target companies with a strong balance sheet and steady profitability. Flexibility makes mezzanine financing appealing.
How Acquifine masters the mezzanine acquisition?
Over the past decade, Acquifin has been one of the fastest-growing companies in the acquisition through mezzanine space. At Acquifin we offer a thorough and transparent process with which to finance companies. We also provide an advanced level of support to our clients and their management teams, including dedicated leasing experts who will manage your company on a day-to-day basis. The goal is simple: make more money by creating value for our clients and keeping them happy in the process. To accomplish this, Acquifin provides robust and flexible options to acquire your company.
For manufacturing companies, we offer two types of acquisition through mezzanine funding. These include private equity mezzanine and public equity mezzanine financings. Our process will ensure that you understand exactly what each financing entails in terms of potential tax considerations and other issues that can affect your company’s business plan. Acquirers can also rest assured knowing they are working with a seasoned adviser for their acquisition needs.
Tax advantages are a popular tool used by Acquifin. The use of debt to acquire the company you are using to acquire an even larger company is a common strategy. When Acquifin funds your acquisition through a mezzanine, we can help you minimize the tax burden from debt incurred during the acquisition. We have many years of experience with both public and private debt consolidation that is financed via mezzanine acquisition, allowing companies like yours to eliminate their out-of-pocket costs while also saving on taxes.
There are many advantages to this type of financing but to discuss those here would make this article far too long. Instead, we’ll focus on the common myths that exist about mezzanine financing and show why it might be the best financing solution for your company.
Myth #1: Mezzanine is too expensive
The first myth about mezzanine financing is that it is more expensive than other types of financing. This is simply not true. Mezzanine is a lower-cost version of debt financing, and the amount of debt you need is often close to or even less than the amount needed for a typical business loan.
Myth #2: Mezzanine won’t work for your company
One of the most common myths about mezzanine financing is that it isn’t the right option for your company. While it is true that mezzanine financing works best for companies with a track record of paying dividends, especially where the target company has been in business for around three years, this does not mean that your company can’t use a mezzanine to purchase new companies or add to an existing business.
Myth #3: Mezzanine will not work for the target company
Another myth about mezzanine is that it won’t work well with the target company or they won’t want to sell. When used properly, mezzanine financing can benefit both sides. It can help the target company improve their business and it can provide the buyer with a more valuable asset than they would have been able to achieve through a standard loan from a bank.
If you are considering using mezzanine financing to buy any companies you would like to discuss this further and find out more about how Acquifin can help you acquire your target companies.