How Most Leveraged Buyouts are Done 

Private equity firms do hundreds of leveraged buyouts a year. Their typical approach is to offer to buy a controlling stake in a company using leverage they obtained from banks based on the financials of that company.  Often times these firms commit very little of their own money to purchase the business.   With little cash invested, these deals create spectacular returns for the buyout firm.  

Buyout firms also collect large fees up front, as well as additional advisory fees while operating a company they've acquired, and a big share of the investment profits. The average annual management fee to do business with a private equity firm is about 1.5% to 2.5%. The average share of profits is about 20%.  While buyout firms give management ownership, it’s usually less than 20% of the company.  This type of buyout is the most common and is typically called a   Sponsored Leveraged Buyout, where the equity player is the “Sponsor.”

Lantern Capital Advisors Specializes in Non-Sponsored Leveraged Buyouts

For financially healthy businesses, there is another approach that utilizes the same financing techniques the equity firm uses for a leveraged buyout, but management gains operating control.  In fact, management can end up owning 85% to 100% of the Company depending on the situation. These types of buyouts are called Non-Sponsored Leveraged Buyouts and Lantern Capital Advisors specializes in executing these types of leveraged buyouts.

Key Requirements of Non-Sponsored Leveraged Buyouts

Lantern’s clients are companies that typically have the need to raise capital,  complete a business plan, or understand their financial strategy or financing alternatives for one of the following reasons:

1.   Leveraged Buyouts
   

2.   Owner Liquidity
   

3.   The Company Has Become An Acquisition Target
   

4.   Selling Your Company:  Company Exit Strategies
   

5.   Corporate Financial Planning 
   

6. Buying Out A Business Partner or Owner
   

7.   Growth Capital
   

8.   Corporate Finance Strategy
   

9.   Acquisition Financing
   

10. Management Buyouts and Non-Sponsored Management Buyouts
    

11.   Corporate Debt Refinancing
    

12. Writing Your Business Plan
    

13.   Initial Public Offerings / Going Public
    

14.   Middle Market Divestitures
    

Getting Your Leveraged Buyout Funded

Learn More About Lantern Capital Advisors Corporate Financial Planning Services

Investment Banking Fees Vs. Consulting Fees:  Learn About How We Raise Capital For High Growth Companies

Leveraged Buyouts and Corporate Financial Planning  with Lantern Capital Advisors

Lantern Capital Advisors serves as a leveraged buyout advisor and corporate financial consulting firm to profitable, private companies.  As leveraged buyout consultants, Lantern Capital Advisors helps companies develop business plans and raise capital in order to  finance their leveraged buyout, leveraged buyout or partner buyout. 

Based in Atlanta, Georgia, Lantern Capital Advisors often helps companies finance leveraged buyouts throughout the United States.       

In that role, we often help companies access the capital to finance their leveraged buyout on primarily an all debt basis.  This enables management to gain operating and financial control of the company either upon completion of the leveraged buyout or over time as the financing is repaid.    

Lantern Capital Advisors alternative approach for leveraged buyout financing is unusual because most leveraged buyouts are financed by a private equity firm or “‘financial sponsor”.  In those leveraged buyout transactions, the private equity firm typically ends up owning 80-90% of the company stock, even though most of the leveraged buyout financing is provided by third party debt providers. By using debt to finance the leveraged buyout, these private equity firms are able to invest little of their own capital and generate spectacular returns for their investors that dwarf the value realized by management or the selling owner had they accessed the capital themselves without using an investment banker or private equity firm.

Lantern’s leveraged buyout consulting approach uses those same debt financing sources and techniques to fund the leveraged buyout as an investment banker, but without the private equity or investment banking firm involved.   As a result all the ownership of the company is shared between management and the selling owner. This can be attractive to a seller because the purchase price is often higher than a private equity firm will pay, while management gets the opportunity to own substantially more equity (often 80% or more). This type of leveraged buyout is financially and personally rewarding for the owners and managers because they have worked together for years to build the value in the company.

How Equity Firms Execute Leveraged Buyouts

Private equity firms like the Carlyle Group, Kohlberg Kravis Roberts and many others have made huge returns for investors through leveraged buyouts.  Using financial engineering and a lot of debt these firms buyout companies with little money down.  While these types of transactions create spectacular returns for investors, they often shortchange the seller and management teams that drive the business.  Thankfully, owners and management can now use these same financial tactics to buy and sell their business and have the benefit accrue to them...via a Leveraged Buyout assisted by Lantern Capital Advisors.  Read More about Leveraged Management Buyouts

      Lantern Capital Advisors

      In The News

   Lantern Capital Advisors

   Published White Papers

Lantern Webinars