What Acquisition & MBO Financing Advisory Covers

Acquisition and MBO financing advisory covers the full capital stack around a defined transaction, anchored in the target’s cash generation profile and the sponsor’s objectives.

• Review of transaction documents such as LOIs, SPAs, shareholder agreements, and earn out terms to understand fixed deal constraints.
• Analysis of historical and projected financials, working capital profile, and cash conversion of the target and sponsor group.
• Design of a capital structure across senior term loans, revolving facilities, unitranche, mezzanine debt, preferred equity, seller notes, and co investment, as relevant.
• Construction of integrated financial models capturing combined group performance, leverage metrics, covenant headroom, and refinancing profiles under base and downside cases.
• Drafting of financing term sheets from the sponsor side, with leverage, pricing, covenant, and security levels that reflect current market conditions.
• Preparation of lender and investor packs that present the transaction, capital structure, and risk mitigants in clear credit language.
• Mapping, shortlisting, and controlled approach to banks, private credit funds, and other debt providers with appetite for the sector, jurisdiction, and ticket size.
• Comparative review of term sheets, support in commercial negotiation, and coordination with legal counsel through documentation and closing.

The target outcome is a financing package that closes on time, sits inside lender tolerance, and leaves management with enough headroom to run the business rather than the loan.

Engagement Scope & Deliverables

Each mandate is scoped to a specific acquisition or MBO and set out in a written engagement letter. Typical deliverables include:

• Initial transaction review and feasibility note, including leverage headroom and indicative structures that are realistic for the sector and size.
• Detailed capital structure memorandum describing senior, junior, and equity layers, security and guarantees, intercreditor mechanics, and refinancing risks.
• Integrated financial model for the combined group, with cash flow, leverage, and covenant analysis across base, management, and lender cases.
• Sponsor side draft term sheets for senior, unitranche, and mezzanine structures, to be used as a starting point for lender discussions.
• Lender pack or information memorandum focused on credit, not marketing, including business overview, transaction rationale, financials, risk analysis, and structure.
• Shortlist of potential lenders and funds, with profile notes and an agreed approach strategy that avoids wide, uncontrolled distribution.
• Ongoing support during lender Q and A, term sheet comparison, and negotiation of key commercial points such as covenants, baskets, and fees.

Legal drafting, tax structuring, and formal due diligence are handled by specialist advisers and counsel. FG Capital Advisors concentrates on the financing structure, lender messaging, and process management.

Frequently Asked Questions

Do you source targets or run full M&A sale processes?
No. FG Capital Advisors focuses on financing for acquisitions and management buyouts where a defined target and transaction already exist. Target sourcing, sell side mandates, full auction processes, and valuation opinions are outside this scope and handled by corporate finance and M&A advisers.

What deal sizes do you focus on?
Mandates typically involve enterprise values from around USD 10 million into the low hundreds of millions, where debt funding is meaningful and specialist advisory is justified, but transaction sizes are often below the internal thresholds of large investment banks.

Can you guarantee that debt will be raised?
No advisor can guarantee financing. FG Capital Advisors frames and presents the transaction in a way that is consistent with market practice and lender expectations, but final decisions remain with credit and investment committees. Market conditions, sector sentiment, and lender balance sheet capacity all influence outcomes.

Do you only work with new lenders?
No. For many buyers, existing relationship banks are a natural starting point, and mandates often combine existing lenders with new institutions to reach the desired structure. The lender mix is driven by appetite, pricing, and the level of flexibility required in covenants and future transactions.

Can you advise on seller notes, earn outs, and equity terms?
Yes, at a commercial and structural level. Seller notes, earn outs, and preferred equity often sit between lenders and common shareholders in the stack, so they need to be designed with both viewpoints in mind. Legal drafting of the relevant agreements is handled by counsel based on commercial parameters.

Do you work on success fee only terms?
No. Acquisition and MBO financing advisory is charged on a fee basis as set out above. In some cases, especially with repeat buyers, success linked elements may be added on top of a base fee, subject to regulation and lender consent. Requests for success fee only mandates are declined.

What information do you need before committing to a mandate?
At minimum, a signed LOI or agreed heads of terms, recent financials for the target and sponsor, a clear view of equity commitments, and existing debt obligations. Without that information, leverage, structure, and feasibility cannot be assessed credibly.