What is multiple arbitrage, and what role does it play in the private equity space? In this post, we discuss what it is, why it happens, and how it works in acquisition markets. What is Arbitrage? Before diving into multiple arbitrage, it is important to understand arbitrage itself. Arbitrage is the purchase and sale of […]
You might have noticed that there are a variety of distinctions within private equity: small business, lower middle market, middle market, and upper middle market. Pinpointing the differences among them can be confusing and seem irrelevant to everyday business tasks. But there may come a time when this knowledge matters; if you are considering selling […]
EBITDA is one way to measure a company’s ability to generate cash flow. Unlike net income, it does not account for the company’s interest and tax payments, amortization costs, and depreciation. In doing so, it strives to capture a business’s cash earnings before the interference of expenses. EBITDA is important because it is often correlated […]
The question of, “should I sell my business?” is perhaps one of the biggest choices you will face. Maybe your business is rapidly growing and market value is high, maybe you are facing burnout, thinking about retiring, or indecision simply has you feeling stuck. Whatever your situation and personal goals, we hope this guide helps you gain […]
Contemplating how to grow your business can feel overwhelming. The options are almost limitless: invest in new technology, upgrade equipment, expand your online presence, add a new location, etc. It is easy to imagine how any number of these concrete changes could power growth— the hardest part is deciding which ones to focus on. But […]
My last post on acquisition financing covered senior debt. This post will cover Mezzanine debt. Specifically, I’m going to talk about: What is Mezzanine Financing? What is Mezzanine Debt? Mezzanine Debt vs. Senior Debt Mezzanine Debt vs. Equity Mezzanine Debt Uses Mezzanine Debt Interest Rates Mezzanine Finance Structure Mezzanine Debt in Small Company Acquisitions Mezzanine […]
What is Senior Debt? Senior debt, also commonly called a senior term loan, is a loan received from a traditional commercial bank that has a specified repayment schedule and either fixed or floating rate interest. Through the years we have found that small company owners often don’t have a complete understanding of the types of […]
Earlier this week, I had a long conversation with an owner of a small business regarding his annual draw and how this draw, unlike a salary, is not reflected in his company’s income statement and why the difference is important in valuing a small business. This issue frequently arises when a small business owner is […]
Service providers are an important part of small company mergers and acquisitions (M&A). 1719 Partners relies on various attorneys, accountants, environmental consultants, etc. 1719 Partners has long-standing relationships with a number of fine firms. These service providers are experts in their fields and we value their input. We have seen instances where sellers let their […]
Growing a business is exciting, but it does not come without doubt or anxiety. One problem that can cause anxiety is difficulty “keeping up with demand.” This demand can take different forms: there is consumer demand and skill set demand. Consumer demand is often more straightforward and easier to handle. Skill set demand, however, can […]
