Glossary Terms – Leverest

(Owner) Roll Over

Daniel Högel — Tue, 26 Apr 2022 18:41:34 +0000

Feature in an acquisition where existing equity owners such as high-ranking managers or founders, partially or fully, roll their equity stake into the new capital structure used to acquire the target company. This common feature is very appealing to Private Equity investors since it increases the alignment of the sponsor’s and founder’s interests.

Add-on Financing

Daniel Högel — Mon, 21 Mar 2022 12:23:39 +0000

Financing of an acquisition in which a portfolio company of a Private equity firm (platform company) acquires a smaller business in the same industry to pursue a product or geographic extension or/and to scale and achieve margin expansion.

Adjusted EBITDA

Daniel Högel — Mon, 21 Mar 2022 12:22:24 +0000

EBITDA figure that takes into account adjustments due to one-off cost items or extraordinary costs to illustrate a sustainable EBITDA figure.

Amortization

Daniel Högel — Mon, 21 Mar 2022 12:23:14 +0000

Repayment of a loan facility that either takes place in fixed installments over the loan lifetime or at the end of the maturity as a bullet repayment.

Arrangement Fee

Daniel Högel — Mon, 21 Mar 2022 12:24:17 +0000

Fee charged by a lender to a borrower to compensate the lender for adminstrative and management costs during origination. Usually the arrangement fee is payable at closing (or drawdown) of a loan.

Cash Sweep

Daniel Högel — Mon, 21 Mar 2022 12:24:43 +0000

A contractual obligation of a borrower to use predefined surplus cash to repay debt.

Change of Control

Daniel Högel — Mon, 21 Mar 2022 12:25:09 +0000

In the lending environment, change of control clauses allow the lender to assert pre-defined contractual rights if there is a change in the ownership structure of the target company.

Commercial Due Diligence (“CDD”)

Daniel Högel — Tue, 26 Apr 2022 18:53:50 +0000

Major part of the Due Diligence phase where a consulting company examines the strengths and weaknesses as well as the opportunities and risks of the target company in the context of its strategy, industry and macroeconomic environment. Usually, a CDD report is drafted that might be shared with potential lenders after exchanging a release letter.

Commitment Fee

Daniel Högel — Fri, 25 Mar 2022 13:24:56 +0000

Fee charged by a lender to a borrower to compensate the lender for providing access to a potential loan which is committed but undrawn. Use cases are e.g. a Revolving Credit Facility or a Committed Acquisition Facility.

Committed Acquisition Facility (“CAF”)

Daniel Högel — Tue, 26 Apr 2022 18:59:43 +0000

A loan facility that is committed at closing and that can be drawn for permitted add-on acquisitions over a certain availability period.