Buying a company is not just finding the right target and winning over the seller. It is assembling a financing package — and the decisive question is not the one you might think.
In many buyers' minds, the central topic of an acquisition is the target: finding it, valuing it, convincing its owner. That is half the journey. The other half — the one that sinks otherwise well-advanced deals — is assembling the financing. An SME buyout is rarely financed from a single source: it combines an equity contribution, one or more layers of debt, and often partners in the capital. Each piece has its own conditions, timetable and requirements. The assembly is the deal.
Most buyouts rest on a leveraged structure — the LBO. A holding company, set up by the buyer, acquires the business with a combination of equity and borrowings; the debt is then repaid out of the acquired company's earnings. Leverage makes it possible to acquire a company worth more than the equity available — which is what puts a buyout within reach of executives who are not personally wealthy.
The same principle serves very different projects: a buyout by the incumbent managers (MBO), by an outside executive (MBI), or a sale to yourself to secure part of your wealth while staying in charge (OBO). The financial structure is similar; the human project is very different.
Around the buyer's personal contribution, several sources combine:
A second buyer in the capital can also change the shape of a file when it brings genuine synergies: a skill, a new vertical, commercial access. The assembly is not only about amounts — it is about contributions.
The classic trap is to start from the asking price and look for the debt that finances it. The sound reasoning runs the other way: start from what operations can repay without strangling the business, and derive the realistic scope of the deal from there.
That debt capacity cannot be read off the annual accounts as they stand. It is calculated on recurring, normalised profitability — restated for exceptional items and for the seller's management choices. That is the number the banks will look at, and it is what separates a robust structure from one that asphyxiates the business by its second year.
Banks, funds, private debt: putting the relevant financiers in competition at the right moment is the most effective lever for improving the terms of the financing — pricing, covenants, governance. And as in a sale, the file must be ready before the discussion opens: a clear structure, a defensible valuation and a credible business plan save months — and improve terms.
Our role in these transactions: structure the deal, then finance it. Scoping and valuation, holding architecture, sourcing and competitive selection of partners, negotiation through to closing. The balance between price, debt and project is built — not observed.
To go further: our LBO & buyouts service. On the seller's side, the same mechanics apply: see sale & succession. And upstream of any project, the question of value: What is my business worth?
It depends on the target's profitability and stability: the more recurring the cash flows, the more room debt can take. The contribution can be topped up by a minority fund or vendor financing — every file has its own balance.
As much as its operations can repay without strangling the activity. It is calculated on the company's recurring, normalised profitability — not on the price the seller hopes for, nor on the annual accounts as they stand.
In the region of 6 to 9 months from scoping to closing for a leveraged deal, depending on the complexity of the structure and the number of partners to bring together.
Thirty minutes to lay out your project and see what assembly could carry it — with no commitment.
Let's discuss your project →