Old Deals, New Terms
Mid-market lenders are putting the screws to private equity firms, when it comes to bolt-on acquisitions. For example, imagine you launched a manufacturing acquisition platform in 2006, and used leverage to fund the initial formation and acquisitions. Chances are that the debt terms were pretty loose, or at least much looser than you could get today. So when you go back to your banker to help finance a bolt-on acquisition, you get told: (A) You’re not going to be able to get the 2006 terms for the bolt-on, and (B) In order to get bolt-on financing, you’ll need to rework the original 2006 loan terms. “Banks now want to reset any deal cut under the old rules, and will use any excuse to do that,” says Stuart Kohl, co-CEO of
23 October 2008•2 mins read
