Interesting question. I've yet to encounter a searcher who specifically targeted a turnaround. I would think that NOL carryforwards would need to enter the conversation at some point. From the financing side I think asset-backed financing (or even future receivables) would be your best bet if there is insufficient cashflow.

I've seen some of these in strategic situations, not pure searcher. Assuming the acquirer is bullish that they can figure out how to improve gross margin, the biggest hurdle will be whether there is existing debt in the business. If so, it is harder to be creative without covering or assuming that debt. Without debt, you could be structuring some cash upfront and paying on a share of GM delivery.