Acquisition Finance For Sponsors

Leveraged Buyout Financing

Leveraged buyout financing is the debt a buyer uses alongside equity to acquire a company, repaid from the target's cash flow. Financely designs the LBO capital stack, senior, unitranche, second lien, mezzanine and seller paper, and places each tranche with lenders and investors under a fee-based engagement.

Who Is This For?

  • Private equity firms and independent sponsors buying a platform
  • Management teams leading a buyout with sponsor backing
  • Search funds and operators moving into larger, sponsor-style deals
  • Buyers who have a debt quote but want the full market tested

What Do You Get From Financely?

  • A capital stack designed around debt capacity, coverage and your return targets
  • A tranche by tranche plan: what each lender layer will need and how they fit together
  • A lender ready package: model, QoE, sources and uses, and investment thesis
  • Placement with banks, direct lenders, mezzanine funds and equity partners as required
  • Help with intercreditor terms, covenants and closing

Financely is an arranger and advisor, not a lender.

How Is LBO Debt Typically Structured?

  • Senior secured debt: first lien term loan and revolver, lowest cost, tightest covenants
  • Unitranche: senior and junior risk in one facility; see unitranche acquisition financing
  • Second lien or mezzanine: junior capital that adds leverage at a higher cost; see mezzanine capital providers for buyouts
  • Seller note or rollover: seller paper subordinated to the lenders
  • Equity: sponsor and co-invest equity at the bottom of the stack

What Deal Criteria Do We Typically Look For?

Typical criteria, not hard limits:

  • A defined target under LOI with historical, verifiable financials
  • Stable cash flow that can service debt with headroom
  • An equity contribution that lenders consider meaningful for the risk
  • Management in place or a credible plan to install one
  • A QoE completed or scheduled

How Does the Process Work?

  1. Submit your deal.
  2. Debt capacity review and a fee-based quote.
  3. Structure and package the capital stack.
  4. Placement with matched capital providers.
  5. Term sheet negotiation across tranches.
  6. Close, including intercreditor and funding conditions. See our leveraged finance process and closing timeline.

What Should You Send Us?

  • LOI and deal summary
  • Three years of financials plus year to date
  • Adjusted EBITDA bridge and QoE if available
  • LBO model with sources and uses
  • Equity commitments and sponsor or management background

Related pages

Ready to Structure Your Buyout?

Send your LOI, financials and model. We will reply with a fee-based quote and a proposed capital stack.

Request A Quote

Frequently Asked Questions

How much debt can an LBO support?

It depends on the target's cash flow, sector, collateral and lender appetite at the time. We estimate debt capacity for your deal rather than quote a general multiple.

Do you provide the LBO loan?

No. Financely structures and places the debt with third party lenders and investors.

What is the difference between senior debt and mezzanine in an LBO?

Senior debt is secured and paid first at a lower cost. Mezzanine sits below it, costs more and often carries warrants or a PIK component.

Can a seller note be part of the LBO financing?

Yes, if its subordination and payment terms satisfy the senior lenders.

How long does LBO financing take?

It depends on diligence, QoE and lender approvals. The quote includes a realistic timeline for your deal.

What does your advisory cost?

It is fee-based. You get a written quote after we review the deal.

Disclaimer: Financely is an advisory and structuring platform. We do not guarantee issuance, lender approvals, or transaction closing outcomes. All mandates are subject to underwriting, KYC and AML checks, compliance review, counterparty acceptance, and final provider decisions. This page is provided for commercial information only and does not constitute legal, tax, or investment advice.