Many providers of mezzanine capital require the presence of a large, well funded equity sponsor to participate in a transaction. Merit has no such requirements, working with small funds, unfunded sponsors, and often directly with management teams.
Key benefits of using mezzanine debt in conjunction with a Sponsorless Buyout include the following:
- Merit is able to provide equity along with its subordinated debt. This allows the sponsor to work with just one junior capital provider and still achieve a capital structure with the most efficient cost of capital.
- Our experienced team of investment professionals provides additional manpower and assistance in the labor–intensive due diligence and closing processes, which can be crucial in the short timeframes often dictated by these situations.
- Partnering with Merit enables the management team to achieve a more meaningful ownership position in relation to their cash investment and a greater say in the future of the company than would be possible relative to partnering with a pure equity fund.
- Management will retain operating control of the company as we are not interested in managing the day-to-day operations of the company, but instead prefer to work as a board level advisor to help grow the business.