According to several experts in the industry, we can expect to see an increase in merger and acquisition activity, especially in the middle-market sector in 2013. The perfect combination of market conditions are set up to drive this type of growth, with acquisition financing a sought after capital structure.
What is behind this predicted trend?
In 2012, company profits were used more for working capital verses acquisitions, due primarily to lingering economic uncertainty. The tide seems to be slowly turning. The economy is slowly improving, interest rates remain at historic lows, valuations have corrected to a more reasonable level and debt markets remain strong. Many businesses have been reserving cash over the last few years and have an appetite for growth. Private equity firms with a backlog of exits are creating a high level of divestiture activity.
With economy, business and private equity positions aligning, nearly 80% of companies recently surveyed anticipate at least one acquisition in the coming year and, conversely, one-third of middle market firms are open to outside investors. Motivating factors include the opportunity to get into emerging markets, new geographic territory, build brands and increase profits more quickly.
Why Business Capital?
Business Capital has been providing debt financing and restructuring services to small and middle market companies for over a decade. With a strong background in acquisition financing, BizCap has a proven track record of successfully structuring and syndicating the optimal loan or loan combinations to quickly execute this type of transaction. We understand that all clients are unique and a single lender or loan type may offer only a partial solution to achieving proper levels of liquidity and funding. We have the network and expertise to coordinate more than one lender or debt source and deliver the most appropriate mix of financing, with the most targeted lending source, at the best cost. Business Capital will also restructure liabilities and reduce debt to pave the way for a successful acquisition.
Recent acquisition financing & restructuring deals:
$5 Million Acquisition, Revolving Credit, Real Estate & Term Debt Financing for Beer Distributor
$3 Million Acquisition Financing for Electronic Medical Records Software Company
$7 Million Liability Restructuring for Acquisition by Public Media Conglomerate
To read full reports/surveys, click on links below: