A Look at Leveraged Buyout in M&A

Leveraged buyouts are trending up across the globe, and in 2017, the U.S. saw an increase in the volume of leverage loans of 53 percent. While records for leveraged buyout volume were set in the aughts and again in this century, it's not a new financial tactic for entities that want to acquire brands without tying up existing capital. In fact, one of the largest leveraged buyouts in history occurred in 1989, when KKR leveraged assets and raised a total of $55.38 billion to purchase RJR Nabisco.

Today, both target companies and potential investors should understand leveraged buyouts because it's one of the financial options that can support a successful acquisition. It's also a tactic that some acquiring organizations use to procure companies even when the target company doesn't sanction it (aka, during a hostile takeover).

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Tuck-in vs. Bolt-on Acquisitions

Tuck-in and bolt-on acquisitions typically occur when a larger, private-equity backed entity absorbs a smaller one during M&A activity, often in an attempt to gain specific skills or product capabilities or an expanded market. While the two acquisition types are similar on the surface -- and many people use the terms interchangeably -- slight differences in intent and the way the acquired assets are treated can be seen between tuck-in and bolt-on transactions.

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The Difference Between Growth Capital and Buyout Capital

As other economic factors continue to stabilize after devastating drops during the early aughts, trends in private equity investment continue to trend up slowly over time. Venture capital investments, for example, rose from around $15.59 billion in the United States in 2002 to approximately $71.94 billion in 2017. Typically, these are investments in startups and young, innovative brands, but larger target companies also continue to see investor interest. In these cases, it's more likely specialty investors with the right resources are interested in providing either growth capital or buyout capital.

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The Key Players In M&A

Businesses of all sizes and across all sectors are no doubt familiar with the increasing ubiquity of mergers and acquisitions (M&A). Companies embark on M&A deals for various financial and strategic reasons, but they tend to be rather complex transactions so careful consideration and planning must take place before jumping in head first. One of the key things that a company must understand when determining whether to merge with another company, acquire one, or perhaps be acquired itself is the type of entity or people that will be involved in facilitating the deal. There are different ways to structure an M&A deal and how it is done often impacts the way in which things will play out after the fact. Here are some of the most common players in the M&A space:

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5 Tips To Attract Private Equity

Companies of all sizes and in all sectors are almost always in need of capital infusions, at least at some point in their existence. These days, there are several interesting ways for companies to raise the funds they need. Private equity can be particularly helpful for companies looking to grow substantially, tap entirely new markets, acquire another entity, exit for a handsome sum in the future, and/or simply use capital to expedite any number of other, well-planned goals. But, obtaining an investment from a private equity firm is usually a lot harder than obtaining it from other sources. Companies hoping to leverage this potential avenue have to be at the top of their game. Here are 5 tips to attract private equity:

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The Top 5 Private Equity Buzzwords to Know

Virtually every industry has their own vernacular, although some words and phrases no doubt cut across sectors. The language of finance can be particularly nuanced though because different firms and investors often have such distinct objectives. There has been some crossover lately between areas like venture capital and private equity, so folks working in one or the other will likely encounter some similar concepts and terms in both. Of course, the economic climate, the stock market, and other  investor trends influence which ideas are thrown about more than others at any given time. Granted, many of the words are well known regardless of the frequency of their usage during a particular period of time, but they sometimes take on additional meanings. Here are 5 of the top buzzwords currently circulating the finance world:

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What Is The Best Software Tool For Due Diligence?

Due diligence is a necessary evil that new and existing businesses have to accept. But, the process does not have to be as dreadful as it seems if companies prepare in advance. The key is to gather everything that will likely be needed during an investigation, along with things that may not even be necessary but are a good idea to have on hand just in case. There is nothing worse than trying to put important information, especially detailed financial matters, into a coherent format at the last minute. And, mistakes are more likely to occur if the team is trying do this under the pressure of having to deliver quickly or risk losing a deal. Here is why a virtual data room (VDR) is the best software tool a company can use to prepare for due diligence:

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SecureDocs Market Insights By The Numbers: December 11, 2015

Here is the December 11th issue of SecureDocs Virtual Data Room's Market Insights By the Numbers. A weekly review of top industry transactions, security news, insights into the SecureDocs Virtual Data Room, and a weekly wrap up of complementary resources, courtesy of SecureDocs. Enjoy!

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The Pros & Cons of IPO Alternatives

Not all companies view an IPO as the light at the end of the tunnel. In fact, for many, the mere idea of increased and ongoing expenses, loss of control and privacy, increased pressure to perform, the time and commitment to investor relations, complied with potential threats of hostile take overs and litigation risks are enough to give cause for many businesses to look for other options. However, like the IPO route, they aren't without their inherent risks. Below is a list of potential IPO alternatives, outlining both their pros and cons.

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Benefits of a Virtual Data Room for Private Equity Deals

Private equity firms are a growing and a popular form of investment for many high net worth individuals and institutions. Managers of private equity firms understand the importance of sourcing and closing lucrative deals. Of course, in addition to finding deals that will yield generous returns, managers must diligently supervise the firm’s portfolio, sometimes even providing services and advice to the companies in which it has invested to help achieve maximum profits.

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