M&A Blog

Možnosti financování akvizice

Akvizice lze financovat různými způsoby – kombinací vlastního kapitálu, úvěrů či vendor financování – s cílem optimalizovat návratnost a stabilitu.

Financing Options for Company Acquisitions


When pursuing acquisitions, the buyer always faces a fundamental question – where to obtain the funds to finance the transaction. The choice of financing method has a significant impact not only on the course of the transaction itself but also on the future financial health and flexibility of both the acquirer and the acquired company. A well-structured financing strategy can significantly increase investment returns, while a poorly chosen financial framework can jeopardize the success of the entire project.


In this article, we will explore the different options available for financing the purchase of a company. In a follow-up article, we will look at how the financing structure may be designed in individual cases.


Basic Methods of Acquisition Financing


Acquisition financing can be categorized into several basic types, which are often combined in practice to achieve an optimal capital structure:



1. Equity Financing


Using internal funds represents the most conservative approach to acquisition financing, as it assumes the buyer has existing cash reserves. It can only be used if the investor has high liquidity. However, by accumulating cash, such an investor sacrifices the opportunity to invest those funds elsewhere, and the high liquidity typically results in temporarily lower profitability.



2. Debt Financing


Utilizing external capital allows acquisitions to be carried out with limited equity and potentially increases the return on equity through the leverage effect. The main forms of debt financing include:


a) Senior Bank Loans


  • Provided by commercial banks
  • Typically carry the lowest interest rates
  • Require collateral, either from the acquired company or the buyer
  • Usually include financial covenants that limit future financial flexibility (such as maintaining certain financial ratios)


b) Mezzanine Financing


  • A hybrid form combining features of debt and equity
  • Higher interest rates than senior loans, often accompanied by an equity kicker (a right for the lender to benefit from the company’s value growth)
  • Less restrictive covenants compared to bank loans
  • Typically unsecured or subordinated


c) Bonds


  • Issuance of corporate bonds to finance larger transactions
  • Enable access to long-term financing
  • Usually require a credit rating and strong market reputation



3. Seller Financing


a) Deferred Payment (Vendor Financing)


  • Part of the purchase price is paid in installments over a predetermined period
  • Reduces the buyer’s immediate financing needs
  • Often comes with more favorable interest conditions than external financing


b) Vendor Loan


  • The seller provides the buyer with a formal loan for part of the purchase price
  • Typically subordinated to senior debt
  • May include conversion rights (allowing the seller to convert the loan into equity under certain conditions) or other features to secure additional profit for the seller