Case Study

Management Buyout

securing FINANCING FoR AN ASSET-LIGHT MBO

Management seeks financing for buyout of a professional services company

The operating manager of a well branded professional services company sought $12.5MM in financing to buyout 80% of the company. From previous experience he knew how opaque and inefficient the debt markets can be and so he wanted to ensure he was reaching a broad enough network of lenders.

Due to the nature of the industry, the company had a very asset-light balance sheet and therefore the financing request fell outside of conventional bank loans. Additionally, the principal had been operating the business for 30 plus years with significant owner related expenses. These were adversely affecting historical cash flow numbers.

Cerebro worked closely with the company to offer guidance on EBITDA add backs and deal narrative including crafting a focus on the technology-driven strategy of the company, a key differentiator in their traditional services industry. Cerebro’s own data-driven debt placement process was able to identify a top non-bank lender who resonated with the company’s growth plans. Given the operating manager had implemented many of the technology focused initiatives, the lender wanted to partner with him to continue the tech-focused growth plans.

The MBO was ultimately successful by leveraging Cerebro’s platform and expert team.

Winning Term Sheet

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