Mezzanine financing is an intermediate form of debt supplementing traditional bank financing for private equity transactions (takeovers in the form of LBOs, financing acquisitions, capital restructuring…).
In a deal to acquire a company, mezzanine debt is generally issued in the form of equity-linked bonds (Obligations à Bons de Souscription d'Actions or OBSA) that rank between senior bank debt and equity. With terms ranging between seven and ten years, this debt is redeemed at maturity through a bullet repayment. For repayment it ranks below senior bank debt and above equity.
Mezzanine debt represents a flexible tool for the borrower, providing access to an additional source of borrowing with a marginal impact on the company's cash flows and is less dilutive than an equity investment.
Idinvest Partners provides mezzanine financing to European small and mid-caps, assisting financial investors or management teams in various scenarios: LBOs, capital restructuring, financing internal growth and acquisitions, debt refinancing.