What This Means: Creative financing involves structuring deal funding through non-traditional methods when conventional debt or equity financing is insufficient, unavailable, or strategically undesirable. This can include leveraged buyouts, mezzanine financing, contingent consideration, or complex debt arrangements.
The Challenge: In hotly contested acquisitions, pure cash offers may seem attractive to sellers, but buyers must balance competitive positioning with capital efficiency and shareholder value preservation.
Why It Matters: Strategic financing structures can optimize deal outcomes across all transaction types—whether addressing competitive auctions, bridging valuation gaps, preserving capital flexibility, or aligning stakeholder interests—but require sophisticated execution to avoid overpaying or overleveraging.
Real Deal Example: Disney’s $71.3 billion acquisition of 21st Century Fox assets in 2019.
- The Setup: Disney initially agreed to acquire Fox assets for $52.4 billion in stock, but faced an unexpected challenge when cable giant Comcast launched a competing $65 billion all-cash bid, forcing Disney to restructure its approach.
- The Competitive Dynamic:
- Comcast’s Strategy: All-cash bid at $65 billion ($35/share) – simple but compelling
- Disney’s Response: Hybrid structure at $71.3 billion ($38/share)
- 50% cash component to match liquidity appeal
- 50% Disney stock to share upside potential
- Assumed $19.2 billion in Fox debt
- Acquired $19.8 billion in Fox cash
- Why Disney’s Structure Won:
- Offered higher total value than Comcast’s all-cash approach
- Tax efficiency for Fox shareholders through stock component
- Strategic alignment – Fox shareholders became Disney stakeholders in combined entity
- Financing flexibility – avoided massive debt issuance in rising rate environment
- Outcome: Disney’s hybrid structure provided Fox shareholders with immediate liquidity (cash component) while allowing participation in merger synergies (stock component) – a win-win that pure cash couldn’t match.
Mid-Market Application: While this example showcases a mega-deal between public companies, the same creative financing principles apply powerfully to middle-market and private company transactions. Consider a $10M acquisition where the buyer uses seller financing for 20% of the purchase price, earnout provisions tied to EBITDA growth, and management rollover equity—this hybrid approach can help bridge valuation gaps, preserve buyer cash, and align all parties around success metrics. The scale may differ, but the strategic logic of optimizing deal structure through creative financing remains equally valuable.
Deep Dive Available: For strategies on structuring competitive bids that win on value rather than just cash, including hybrid structures, let’s schedule a discussion.
🌍 Global Pulse
M&A Market Update: September 2025
The M&A landscape in 2025 continues to show divergent trends between large-cap and mid-market activity. While dollar volumes have increased materially thanks to headline-grabbing transactions worth $10+ billion, deal counts remain down 10-20%, and the mid-market has not seen the same boost.
Economic policy is stabilizing, with reduced uncertainty and supportive tax and deregulation tailwinds, though tariff volatility persists. Financing remains robust as private debt and secondary capital strategies help firms meet their liquidity needs, especially in the mid-market where traditional exits have proven difficult.
Non-discretionary services continue to drive mid-market deals, while technology, financial services, and healthcare headline large-cap activity. Recent notable transactions include Advent’s acquisition of LayerZero Power Systems (industrial technology), TopBuild’s $810M purchase of Progressive Roofing (commercial services), and Vomela Companies’ acquisition of PFL Tech (marketing automation software).
Exit activity is expected to build slowly but steadily alongside continued M&A momentum into 2026—should interest rate relief materialize as expected(1)
🤖 AI Tools Spotlight
Gamma Launches Version 3.0 With New AI Capabilities
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