Strategies To Cover Acquisition Costs

searcher profile

August 08, 2024

by a searcher in Atlanta, GA, USA

Does anyone have proven strategies when it comes to covering acquisition costs, such as retainers, quality of earnings, legal, site visits etc?

0
5
84
Replies
5
commentor profile
Reply by a professional
from University of Calgary in Vancouver, BC, Canada
I am a little late to the party here. This is technically not about covering costs, but many of our clients would hold off doing fulsome legal due diligence until they have sent out a draft purchase agreement and have received comments from the other side. I have seen it done the other way too (i.e. DD first then agreement drafting). This approach mostly helps you mitigate costs for broken deals since you can control the workload (and fees) of the advisors. For successful / closed deals, we let most of our clients pay at or post-closing.

Thanks for the tag ^redacted‌.
commentor profile
Reply by a searcher
from Letourneau University in Portland, OR, USA
An Acquisition Line of Credit could be a good solution, if even only to cover DD costs. I agree with Snorre above that often times core consultants (esp. legal) will allow you to defer some costs, however it really depends on the timeline to closing. Our deals take 12 months to close so that hasn't really been an option for us until the final two or three months.
commentor profile
+3 more replies.
Join the discussion