Merchant Banking/ The Process

The closing occurs after concluding due diligence and the financing is in place.

In general, the process takes 90 days from the execution of the Letter of Intent or the Term Sheet. To speed up the process, the seller can expedite the audit, hire experienced and efficient counsel, produce requested information quickly and respond promptly to drafts of agreements.

We conduct much of the due diligence before any legal agreements are signed. At Crown, we use a checklist to obtain information from a seller; the resulting report is then a convenient format for Crown, the company and its advisors to work from.

Some acquisitions require debt as well as equity to finance the transaction, in which case Crown raises debt financing from a lender who specializes in acquisition financing. We maintain strong relationships with several such lenders.

Based on our due diligence report and our research into a company, we write a comprehensive financing proposal that gives lenders a full picture of the company in question — its industry, competitors, financial performance and employees — and meeting any lender requirements. Based on the due diligence and management input, Crown completes financial projections for the lenders.

Immediately after Crown and the seller both sign the Term Sheet or Letter of Intent, we contact a group of lenders we have strong working relationships with and who have expressed interest in financing the acquisition.

We forward the financing proposal and financial projections to the interested lenders. Lenders who are still interested in the transaction will visit the company and meet with its management.

Finally, we proceed with a single lender, who conducts any remaining due diligence.