Insight - 22 October 2021

ABL to Support Leveraged Acquisitions

Asset Smarter Bites: PE, Corporations

ABL to Support Leveraged Acquisitions

Greg Hardiman


APAC’s M&A market is showing strength as deal making exceeds pre-pandemic levels. In Australia, the value of the Australian M&A market hit AU$110bn in 1H21, on 447 deals a slight decline on deal numbers from 1H19.  Consensus suggests there is an upward trajectory for the remaining half of 2021 and into 2022 with strong market sentiment and majority of dealmakers with capacity to participate in the low interest rate, post pandemic economy.

In this environment Asset Based Lending (ABL) are supporting the M&A market with leveraged purchase opportunities. ABL structures allow for higher leverage in riskier industries and business activities supported by the company’s underlying collateral. AR, Inventory, PP&E and intangibles combined to maximise availability for a client.

An ABL structure covering AR and P&E was a used to support Allegro Funds recent acquisition of Toll Express as an example and Hilco were there in support providing our in-depth coverage of the collateral.

In our opinion global low interest rates, private & corporate investment, household consumption, and Government supported economic growth is likely to see the M&A markets continue to flourish until at least to end of 2022. In fact, Hilco are working on a record number of ABL related appraisal and diligence projects across a broad range of industries. Regardless of the industry or whether you are a buyer or seller going to market ABL might be the solution you have been seeking.

For confidential discussions on collateral and business reports contact Greg Hardiman or Ben Roden from Hilco APAC.

Greg Hardiman, Hilco APAC Director of Deals & Origination

Greg is regarded as both a highly effective business executive and market leader in developing the right solution for clients. Well known for his calm and thoughtful approach, combined with his ability to interpret financial information with judgement involving the most complex situations, Greg aims to find a creative pathway to the right solutions for his clients. Clients know Greg drives outcomes that consider their wider business objectives.

Ben Roden, Hilco APAC Managing Director of Valuation Services

Ben’s career has spanned over 20 years in valuing balance sheet assets across a range of industries. With over 20 years valuing balance sheet assets and enterprises from a broad range of industries Ben has acquired deep knowledge in Projects, Valuations, Marketing and Risk Management. Leading the Hilco Valuations division of the Hilco Global APAC business, Ben works brings an understanding of market-based outcomes and access to global markets for businesses.

Published: Hilco APAC