Real Estate Business Acquisition Finance
$6.4m Commercial Facilities
Service
Business & Corporate Finance, Debt Advisory
Funding Amount
$6.4m
Funding Purpose
Real Estate Business Purchase
Industry
Real Estate Services
The Scope
- A well-established real estate property management business was looking to fund an acquisition.
- Their preference was to leverage their existing business for as much of the capital as possible to retain cash reserves for future acquisitions.
- The transaction had minimal tangible property security available with no new security being provided aside from the target business.
- Nexus was engaged to arrange the finance for the transaction including negotiating the equity requirement, facility structure and covenant suite.
What We Did
- Arranged a business valuation of the existing and target business at the cost of the lender.
- Prepared a comprehensive credit paper highlighting the performance of the business over the past two years since the lender had on-boarded the client.
- Prepared forecast modelling of the existing and target business including multiple downside scenarios.
- Stress tested the expected covenant suite to ensure the ability to adhere to covenant settings in the event of a business deterioration.
The Result
- Approval from their existing lender within 2.5 weeks of submitting the credit paper.
- 100% finance for the acquisition + associated costs and Bank Guarantee facility for a rental bond.
- No new security apart from the target company with the transactional largely secured by cash flow/balance sheet. i.e. minimal property security in relation to the Group facilities.
- Interest-only structure.
