Decentralized finance, also known as DeFi, makes financial products available to anyone on a decentralized blockchain network. Through this relatively new software system, all parties can interact directly through applications, eliminating a need for middlemen such as banks or institutions to facilitate transactions. It also eliminates a need for proof of identification or age requirements that banks typically require. There is no need for anyone to know anyone else’s identity. Everything occurs over a public blockchain, using smart contracts, which are bits of code that execute specified actions once certain criteria have been met. It’s based on mutual trust and strict privacy.READ MORE >>
Now that you have found the perfect business for you to acquire, the question is, how do you finance the transaction? Most buyers will use a mix of debt and equity, but if you are a first-time acquirer, you may need help on where to go for the debt piece of the equation.
If you have never acquired another business before, the process of securing a loan for the acquisition might be challenging. Here are some things to consider when looking at your debt options.
Upon your initial conversation with a banker, be prepared to discuss your intent regarding the acquisition and your plans for the business’s future. You should also be ready to discuss your background and its relation to the company you are buying. In addition, you will want to understand the bank’s commercial loan options and which might be best for your goals. For example, you might need a traditional commercial loan or an SBA loan, depending on the acquisition size and details. While there are alternative financing options available, they could be much more costly.
Most financial institutions will underwrite the business and the borrower. If you own a similar business, they might underwrite both businesses as if they are one. Be prepared with documentation regarding your credit history, tax returns for all related entities (potentially including your personal tax returns), collateral options, and industry experience. The financial institution might request a balance sheet, profit and loss statement, projections, etc., for the business you are considering purchasing.
Lenders will provide you with their initial terms. Be sure to compare interest rates, fees, and other terms closely. Some terms you may want to consider are prepayment penalties and covenants that might affect the business. If there is real estate involved in the purchase, you will want to ask questions about the bank’s need for appraisals and various phases for the property.
After considering your options, you will then need to apply for the loan. Each financial institution will have its specific application and underwriting process. Depending on the loan size and the bank, the loan request may need to go to a special loan committee that meets periodically. This could add time to the approval process. You might want to discuss debt options with a bank with which you have a current relationship, as they will know you best given your existing history. If you have already received a loan from the bank, it could make the transaction process easier, which will make for a much better experience for you and the seller of the business you are looking to acquire.
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Benchmark International is pleased to announce the successful transaction between The Colography Group, Inc. and Halstatt Legacy Partners.READ MORE >>
Now that the COVID-19 pandemic is settling into our rearview mirrors, so many of us have been itching to get out there to enjoy an indulgent vacation and a much-deserved change of scenery. So, here you will find a list of some of the most luxurious hotels in the world (in no particular order) to help you start planning your next beautiful adventure or a quiet escape from it all.READ MORE >>
There are many reasons that mergers and acquisitions are critical tools for companies of all sizes, some of which may not even be fully realized by business owners. Ultimately, it’s all about achieving positive results for the business by making strategic moves that make sense, all depending upon what the fundamental goal (or goals) may be. For companies in the lower to middle market, M&A can be an extremely effective solution for a variety of purposes.READ MORE >>
The recent cyberattack on the Colonial Pipeline in the U.S. is a glaring reminder of the vulnerabilities that all industries face, as well as the costly repercussions that can be a result of such a situation. Colonial Pipeline Co. paid the hacker group $5 million to have the company released from the ransomware to restore service to the critical pipeline. This actually turned out to be a wasted $5 million. For that high price, the hackers provided the company with a decrypting tool to restore its disabled computer network. But this tool was too slow, and Colonial ended up using its own backups to restore the system.READ MORE >>
Benchmark International is pleased to announce the transaction between our client, a prominent industrial services firm, and Crete Mechanical Group (“CMG”).
Crete Mechanical Group (“CMG”) is a multi-site owner, operator, and business partner to mechanical service businesses in the United States. CMG partners with entrepreneurs and owners of HVAC, electrical, plumbing, controls, and other mechanical services companies to help them grow revenue, increase profitability, and transition ownership.
Our client is a leading industrial services firm providing electrical, mechanical, automation, fabrication, rigging, and maintenance services to various industries. The company has established an outstanding reputation in providing superior customer service within its regional market.
Senior Transaction Associate Sunny Yang Garten at Benchmark International added, “It was a pleasure to represent our client, a leading industrial services firm, in this transaction with Crete Mechanical Group. Our client was seeking a partner that shared their vision and offered the right deal structure, and Crete Mechanical Group was aligned with our client’s growth strategy. On behalf of Benchmark International, we wish both companies continued success.”READ MORE >>
The COVID-19 pandemic is critically affecting the world's economies when businesses were already adapting to volatility and uncertainty as a way of life. With the economic outlook and threats of all kinds continuing to test even the most influential organizations, companies face various challenges as they work to find growth and stay competitive. One of the most beneficial ways of growing an existing company is through mergers and acquisitions (M&A).
Few firms throughout the world reach the top without conducting at least a few M&A transactions. The most well-known firms employ professional teams whose only role is to seek out attractive potential acquisitions tells its own story. When implemented well, an active M&A strategy can be a highly productive process for any company. M&A always has and always will be a long-term game. We are now in an environment where more and more business owners feel comfortable taking some calculated risks and driving forward an M&A agenda to build the company's future.
Private equity (PE) expects to see record-level fundraising this year. Even amidst the ongoing COVID-19 pandemic, analysts predict that the PE industry will raise an anticipated—and unprecedented—$330 billion in total capital in 2021. According to a survey performed by Ernst & Young, 49% of global companies plan to acquire in the next 12 months actively, and the majority are looking for assets internationally rather than domestically. A healthy fundraising and active acquisition environment coupled with the existing $1 trillion in disposable capital means excellent news for those looking to grow their business. Interest rates are low, equity markets are high, and investors demand, value, and reward growth. With numerous potential international acquirers with strong balance sheets and strong liquidity, our advice to companies is to look for logical strategic targets, be proactive, and focus on long-term value creation.
The U.S. and the U.K. remain primary centers of global M&A. The U.S. consistently holds the top spot for both domestic and for international M&A. The U.K. regularly ranks in the top three. If you are thinking of growing your business internationally, it is worth noting that M&A is regulated in all countries worldwide and has many advantages. Below are four key benefits of merging with or acquiring another company internationally.READ MORE >>