Keene Advisors

How Are Leveraged Buyouts (LBOs) Financed? A Breakdown of Key Techniques ???? Leveraged buyouts (LBOs) are a popular strategy for acquiring companies using a significant amount of debt. While this approach can drive strong returns, it also carries the risk of being overleveraged, which could ultimately lead to bankruptcy. Here's how LBOs are typically financed: ?? Bank Financing: Banks or syndicates provide term loans and revolving credit facilities to cover acquisition and working capital needs. ?? Bonds or Mezzanine Debt: Bonds are debt instruments sold to investors, with interest paid over time. Mezzanine debt is a type of subordinated financing that often carries higher interest rates and equity warrants to compensate for increased risk. ?? Seller Financing: In some cases, the seller provides financing through deferred payments or installments. While less common in large-scale LBOs, seller financing is more prevalent in smaller, privately negotiated deals. ?? Private Equity (PE) Sponsorship: PE firms act as sponsors, contributing equity through a fund structure. Understanding these financing methods is crucial for anyone exploring M&A or private equity transactions. Read more: https://lnkd.in/eq8-e6Vq #LBO #LeveragedBuyouts #MergersAndAcquisitions

?? M&A Activity is Expected to Rebound in 2025—Are You Ready to Maximize Your Business’s Value? After a challenging few years in the M&A landscape, 2025 is shaping up to be a stronger year for deal activity. With stabilizing interest rates and renewed buyer confidence, business owners considering a sale should start preparing now to maximize their valuation. ?? One critical factor in achieving the best possible sale price? EBITDA addbacks. Accurately identifying and justifying these adjustments can have a significant impact on your valuation and deal terms. Our team breaks down how EBITDA addbacks can enhance business value in a sale transaction—a must-read for any owner looking to position their company for a successful exit. ?? Read more here: https://lnkd.in/eivwW8Dp Are you planning for a potential exit in the next 9–18 months? Let’s discuss how to ensure you’re positioned for maximum value. #MergersAndAcquisitions #EBITDA #BusinessValuation #PrivateEquity #InvestmentBanking

Private equity is a dynamic space, and understanding the life cycle of a PE fund is critical for business owners and management teams looking to raise capital. From fundraising and deal sourcing to value creation and exit strategies, each phase presents unique challenges and opportunities. Check out the details on how PE firms fundraise, invest, and harvest returns for their funds. Whether you’re a business leader preparing for a private equity transaction, or an investor looking to optimize your engagement with PE firms, you'll want the benefit of these insights. ?? Read the full article here: https://lnkd.in/dR6z5hXm #PrivateEquity #GrowthCapital #CapitalRaising #KeeneAdvisors #CorporateFinance

With data at the center of modern business strategy, PE firms can utilize data analytics to fuel better decision, driving value and maintaining a competitive edge. YOU can get the same ROI by using data analytics in your decision making in these 4 ways: - Grow Revenue: Analyze customer behavior, purchasing patterns, and market trends to enhance segmentation, personalize offerings, and identify new market opportunities. - Cut Costs: Use data from supply chains, production, and inventory to find inefficiencies and drive cost savings, leveraging predictive models to optimize demand and avoid waste. - Optimize Talent: Track employee productivity and turnover to refine hiring, retention, and training strategies, ensuring the workforce is managed effectively. - Improve Communication: Customized dashboards with real-time, visual insights keep everyone aligned and empower non-technical teams with data-driven priorities. Want to dive deeper into the best strategies to drive value for your investors? Read our latest white paper “How to Generate Private Equity Returns for Your Shareholders” https://lnkd.in/em6c9Kgy

A strong board of directors can be a game-changer for any company, offering strategic insights that go beyond guidance to deliver real value. To ensure the right mix of expertise, private equity firms often assess gaps and align board capabilities with the company’s strategic goals. Here are seven essential areas of expertise every board should have: 1?? Industry Knowledge: Deep sector expertise helps navigate industry trends and competition. 2?? Operations Insight: Operational know-how enhances efficiencies and streamlines processes. 3?? Finance & Accounting: Strong financial acumen is critical for financial oversight and growth planning. 4?? Governance: Ensuring best practices in governance builds a strong foundation for sustainable growth. 5?? Value Creation & Exit Strategy: Experience in value creation ensures the company stays focused on maximizing returns. 6?? Independence: Independent directors bring unbiased perspectives that drive balanced decision-making. 7?? Diversity: Diverse backgrounds and perspectives enrich board discussions and strategies. Creating a Board with these skills not only fills current gaps but also positions the company for long-term success. Learn more about building a high-impact Board in our latest white paper: “How to Generate Private Equity Returns for Your Shareholders” https://lnkd.in/em6c9Kgy #FinancialConsulting #PrivateEquity #StrategyConsulting #ValueCreation #ShareholderReturns

?? M&A Update: Q3'24 data shows M&A activity from Private Equity investors is down 64% from peak levels amid a higher interest rate environment. If you are a founder-owned or private company considering a sale, how can you adjust in 2025? Let's discuss: - How a higher rates leads to lower valuations - BUT, with thoughtful preparation, you can create a compelling value creation plan and growth story to increase your valuation despite the interest rate environment ?? Explore the full article: https://lnkd.in/eN3zfWpW #FinancialConsulting #MergersAndAcquisitions #InterestRates #PrivateEquity #StrategyConsulting

?? Corporate Credit Spreads Have Narrowed to the Lowest Level in 20-years – What It Means for Your Business ?? For companies carrying debt, here’s why tightening spreads matter and how to take advantage of favorable market conditions: ? Lower Interest Costs: Refinancing existing debt at tighter spreads may lead to more favorable rates. ? Boost Cash Flow: Lower interest costs can free up capital to reinvest in growth, innovation, or operations. ? Financial Resilience: Extending debt maturity reduces near-term financial risk and fortifies your balance sheet for future challenges. As the market shifts, forward-thinking companies are already leveraging these conditions, but timing is key — waiting too long could mean missing out on favorable conditions. If you’re considering refinancing or revisiting your debt strategy, now might be the perfect time to act. For a deeper look into these market dynamics, check out the full analysis from Keene Advisors: https://lnkd.in/en3g4VTH ?? Question for You: How is your company navigating the current credit market? Are you exploring refinancing opportunities? Drop your thoughts in the comments! #CorporateFinance #Refinancing #CreditFacility #DebtStrategy #KeeneAdvisors

?? As AI reshapes industries, critics and consumers are asking tough questions. From environmental impact to data bias, can this fast-evolving technology address their concerns by moving to a Public Benefit Corporation (PBC) structure to mitigate some of these challenges? 1?? Climate Change: AI’s computing power demands strain natural resources. 2?? Ethics and Social Issues: Bias in AI-powered tools has real-world consequences. 3?? Safety and Security: Data vulnerabilities and malicious AI misuse are growing threats. ?? We’re exploring what happens after companies like OpenAI and Anthropic make the commitments for social good: https://lnkd.in/evnivzk8

CFOs - - Simplify Your 2025 Budget Planning Dynamic budget modeling gets complicated, so having the right tools can make a big difference. Our 2025 Three-Statement Model Template is designed to support CFOs with a more agile, transparent approach to budgeting. ?? Customizable for Your Business - tailor the template to your specific needs. ?? Save Valuable Time - the end of the year is approaching. Save time and planning resources. Embrace a smarter, more efficient way to plan for 2025. Learn more here: https://lnkd.in/eRAqG38y #CFO #BudgetPlanning #CorporateFinance #2025Budget #FinancialModeling

Did you know that an estimated 70% of M&A transactions never deliver on their expected value? Acquiring or merging as a growth strategy can be wildly successful, when executed properly. Here are three reasons they may fail: - Lack of due diligence: You need a secure, organized and well-managed due diligence strategy to ensure the target company delivers the right information. - Minimal management involvement:? While hiring M&A Advisors (like Keene Advisors) ensures you receive the best counsel, the executive management team still needs to be closely involved in every step of the M&A process. - Hidden debt and instability: The more you know, the better. Transparency and due diligence are the most important factors in an M&A transaction. Learn more about the core strategies for selling your business to maximize return: https://lnkd.in/ej62646e