finance the acquisition 100% with debt
Why can't we finance the acquisition 100% with debt? Would that be possible in practice? Theoretically, the debt would then be equity?
Why can't we finance the acquisition 100% with debt? Would that be possible in practice? Theoretically, the debt would then be equity?
+3,993 | Bank of America - Juniors Strike to start Monday May 6th | 417 | 24m | |
+844 | BOFA ALREADY TRYING TO COVER UP THEIR TRACKS | 79 | 23h | |
+596 | This is a dark day for Wall Street. | 46 | 12h | |
+440 | BofA Associate Death - WSJ, FT, CNBC, Bloomberg | 48 | 8m | |
+191 | How to strike without being fired. | 21 | 17h | |
+184 | Analyst at Bofa FIG-Thoughts | 28 | 1d | |
+169 | Big Layoff at Barclays - 5/1/24 | 88 | 1d | |
+165 | Hey WSJ, BBG, CNBC, FT, it's been more than 72 hours that this BofA IBD Associate was reported dead | 23 | 11h | |
+150 | BofA List | 37 | 11h | |
+132 | Reporters, please post your info in this thread for visibility so people can easily reach out. | 4 | 2h |
Career Resources
Interested
Sure - it’s theoretically possible and practically possible in some small real estate. Why do you think the debt would be equity though? Debt vs equity have very different legal rights. And from who’s perspective - the target or the acquirer? If using all debt and financing, the target receives the sale price in cash (no equity shares given to them). From the acquirers perspective, even if using all debt the acquisition, the specifics of the targets balance sheet will determine how much the acquirer’s equity on its own balance sheet changes.
Assuming this is an LBO context - theoretically yes, anything is possible as long as folks agree to it.
In reality, no investors will provide that debt if they see that there is no equity behind them (i.e. no equity cushion, which implies that Sponsor has no skin in the game).
HA.... oh wait you're serious?
Voluptatem occaecati sit ab deleniti. Perferendis culpa voluptatibus dicta tempora.
Iure saepe et accusantium iusto. Ut sunt fugiat eligendi delectus omnis. Aut in exercitationem architecto quod magnam et. Nesciunt vero molestiae aut omnis.
Voluptatum odio quia incidunt amet vero. Ad ipsum at saepe soluta ea dolorem. Dolores maxime aliquid omnis in illum. Dolores illo sapiente modi itaque perferendis expedita.
Ab facere perferendis incidunt quaerat. Culpa voluptas earum accusantium id mollitia sequi. Fuga vitae ducimus eius quibusdam nam iste similique voluptas. Ut et molestiae molestias a ea sed quod quod.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...