What to do with the Real Estate, in a M&A Transaction?

A buyer I am working with just found his ideal M&A target... Great industry, 2M+ in EBITDA, motivated seller, good forecasts, great Management Team... Everything. BUT, at the negotiation table, the seller decided that the Real Estate ALSO had the be included in the sale.

This specific request by the seller, was a deal killer for my buyer, as he had enough equity to buy the operating company, but not so much to also afford the Real Estate.

What kind of solutions are there for these situations?

1. Depending on the Real Estate asset, through a Sale & Leaseback this could be used for acquisition financing. My team & I, have worked in several engagements like these where the RE was used as acquisition financing. You would work with me, to underwrite the RE, give you an estimate on the valuation and then "adjust the P&L" via the Rent, post-acquisition.

2. You could structure the acquisition of the business upfront, and then also promise to the business owner that the RE will then be sold to a pool of Real Estate Investors, on a sale & leaseback basis.

3. Structuring a lease agreement with a purchase option, between you (the new buyer) and the business owner at a pre-agreed price, that is executable post-acquisition over a period of time. So while at closing, you could argue with him

if you have any situations like these where there is a need for Capital structuring and Real Estate solutions, do let me know and I´ll be happy to help,. Personal email is redacted