Strategic acquisitions, management buyouts and leveraged buyouts are some of the fastest ways to grow a business, reshape a sector or create value for shareholders. They also require significant capital and a financing structure that does not destabilise day-to-day operations.
M&A financing brings together debt, equity and hybrid instruments to fund these transactions. The structure determines who controls the company after closing, how much leverage sits on the balance sheet and how risk is shared between lenders, investors and management.
This guide explains what M&A financing is, how it works across acquisitions, management buyouts (MBOs) and leveraged buyouts (LBOs), and how companies can structure funding that supports growth rather than constraining it. It also outlines how Financely Group helps sponsors, management teams and buyers access tailored capital for domestic and cross-border deals.
M&A financing refers to the capital that funds mergers, acquisitions and buyouts. It sits behind headline purchase prices and determines how much of a transaction is funded with borrowed money versus equity from owners, management teams or financial sponsors.
Common deal types include:
The capital stack for M&A can include:
The goal is to design a structure that can fund the acquisition, protect lenders and give owners a sustainable platform for value creation.
The right mix of capital depends on who is buying the business, the stability of cash flows and the size of the transaction. The examples below illustrate typical structures.
While every deal is different, most M&A financing processes follow a consistent sequence from target identification through to post-closing integration.
The first step is defining the target profile and identifying businesses that fit strategic objectives. Buyers assess:
A preliminary valuation range is developed, often using EBITDA multiples, discounted cash flow analysis and comparable transactions.
Once there is agreement in principle with the seller, the buyer designs a capital structure that can support the transaction value and post-closing plan. That structure balances:
Buyers then engage banks, private credit providers and equity backers to secure commitments. Lenders and investors review:
Term sheets are negotiated for each layer of the capital structure, covering pricing, covenants, security, amortisation and allowed distributions.
At closing, funds flow according to an agreed funds flow statement. Purchase price is paid to sellers, existing debt is refinanced if required and new facilities become effective. Security is perfected over shares and assets of the target and acquisition vehicles.
After closing, focus shifts to operating performance and integration. The acquired business must:
Successful integration and disciplined financial management are what convert a financed acquisition into a value-creating transaction.
M&A financing allows companies to acquire complementary businesses, new capabilities or geographic reach without waiting for organic growth alone. A properly structured package turns an attractive acquisition opportunity into a transaction that can close on realistic timeframes.
Combining debt and equity allows buyers to access larger transactions than they could fund with cash alone. Reasonable leverage can enhance equity returns while spreading acquisition costs over the useful life of the business.
Management buyouts and leveraged buyouts use debt and hybrid capital to support ownership transfers without excessive dilution. Existing owners can sell down while management and financial sponsors gain meaningful stakes aligned with performance.
With committed financing in place, buyers can move quickly in competitive auction processes, provide certainty of funds to sellers and secure attractive assets before rivals can react.
M&A financing can be tailored around the cash flow profile of the target. That includes interest-only periods, step-down amortisation, accordion features for follow-on acquisitions and earn-out arrangements tied to future performance.
M&A financing is relevant for a wide range of buyers, including:
Strategic transactions require more than a generic loan proposal. Buyers need a capital structure that matches transaction size, sector risk, cash flows and the ambitions of the management team. They also need access to debt and equity providers that understand acquisition finance.
Financely Group works with buyers that have defined targets, realistic valuations and credible plans for post-closing performance. Through regulated partners, we:
The objective is to move from indicative interest to committed facilities that can support closing and integration on agreed timelines.
If you are planning an acquisition, management buyout or leveraged buyout, early work on financing gives you more control over timing, structure and negotiation dynamics. A clear view of what lenders and equity backers will support helps you bid with confidence and avoid over-committing to terms that the business cannot sustain.
Whether you are acquiring a single business or building a buy-and-build platform, a structured M&A financing process turns strategy into execution. The right partners can help align debt capacity, equity commitments and seller expectations before you sign definitive agreements.
Share your target, transaction outline and indicative funding needs with our team to explore tailored M&A financing solutions sourced through our global network of lenders and capital providers.
Request M&A Financing TodayDisclaimer: This page is for general information only and does not constitute legal, tax, accounting or investment advice. Financely Group acts as advisor and arranger through regulated partners and is not a bank or direct lender. Any M&A financing, management buyout, leveraged buyout or other capital solution is subject to underwriting, KYC, AML, sanctions screening, legal due diligence, documentation, perfected security and approvals by relevant stakeholders. No public offer or solicitation is made on this page.
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Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.
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Submit a RequestOnce we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.
Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
Financely does not solicit, offer, or accept orders to buy or sell securities and makes no assurance regarding capital-raising outcomes.
Services are strictly business-to-business. Financely does not provide personal finance, consumer credit, or retail advisory services.
Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
Move to a financeable package. Submit the RFQ to initiate underwriting for funding.
KYC and Source of Funds required. Engagements are best-efforts and subject to underwriting. Preference for operating companies with meaningful revenue. See our FAQ and Procedure.
Financely Inc. (“Financely”) provides corporate-finance advice and is wholly owned by Aurora Bay Trust, a trust formed under Bahamian law, together with its authorized affiliates. Depending on deal structure, jurisdiction, and local rules, engagements may be carried out through Financely Group LLC, a non-deposit-taking, non-banking financial company; Ashford Capital Advisory LLC; or another related entity.
Financely and its affiliates are not registered as securities broker-dealers and do not execute securities transactions or hold client funds or securities. When a mandate involves the purchase or sale of securities and a registered intermediary is required, any orders are introduced to and executed by one or more independent U.S. broker-dealers registered with the SEC and FINRA. Those broker-dealers are solely responsible for trade execution, custody, and related regulatory obligations. Nothing in this material constitutes an offer, solicitation, or recommendation to buy or sell any security or to engage in any specific transaction. Before engaging Financely Group LLC, Ashford Capital Advisory LLC, or any affiliate, you are responsible for confirming that such engagement complies with your own legal, regulatory, tax, and other requirements. In the United States, certain advisory activities may be conducted in reliance on exemptions available under the Investment Advisers Act of 1940, including the “foreign private adviser” exemption where applicable. Our services and regulatory status may vary by jurisdiction and by transaction type.
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