Public Commentary: FG Capital Advisors outlines its approach to leveraged buyout (LBO) financing in African markets. This material is provided for informational purposes only and does not constitute an offer.
LBO Financing in African Markets
Sponsors pursuing management buyouts, carve-outs or acquisition of family-owned businesses in Africa often face a gap between equity capacity and senior debt availability. FG Capital Advisors guides clients through every phase of LBO financing—designing debt tranches, sourcing investors and negotiating terms—to secure funding for deals of US$20–200 million.
Market Challenges
- Limited coverage by international banks on sub-US$100 million deals.
- Currency volatility and cross-border capital controls.
- Local collateral laws restrict asset pledges.
- Absence of standardised credit histories for mid-market sponsors.
Our Advisory Services
- Capital-Stack Design: Senior debt, mezzanine, seller notes and sponsor equity.
- Debt Provider Introduction: Regional development finance institutions, private-credit funds and specialized lenders.
- Financial Modelling: Cash-flow forecasts, debt-service capacity tests and sensitivity scenarios.
- Term-Sheet Negotiation: Pricing, amortisation profile and covenant structures aligned to sponsor objectives.
- Closing Coordination: Liaising with legal, tax and regulators to meet conditions precedent.
Process Workflow
- Mandate & Diagnostic: Review target company, industry outlook and sponsor track record.
- Structure Proposal: Outline funding mix, leverage ratios and repayment profile.
- Due Diligence Support: Coordinate quality-of-earnings, legal and commercial reviews.
- Lender Outreach: Present term sheets to selected debt providers and manage feedback.
- Finalisation: Negotiate final agreements, confirm funding commitments and arrange drawdown.
Indicative Terms
| Tranche | Typical Range |
|---|---|
| Senior Debt | 3.5–4.5× EBITDA; SOFR + 300–450 bps; 5–7-year tenor |
| Mezzanine & Seller Notes | 8–12 % IRR; bullet at maturity or PIK; 5–8-year tenor |
| Sponsor Equity | 30–40 % of total purchase price |
Why FG Capital Advisors
- Partner-led mandate with senior bankers focused on mid-market Africa.
- Established network of private-debt providers and DFIs.
- On-ground insight into regulatory and operational hurdles.
- Track record of closing LBOs under local and cross-border frameworks.
Next Step
To discuss your acquisition plans and explore tailored LBO financing options, schedule a consultation with FG Capital Advisors.
This document is provided for informational purposes only. It does not constitute investment advice or an offer to buy or sell any security or service. Independent professional guidance is recommended before acting on any information herein.
