What is a Syndicate? A syndicate is an organized group of just about anything – corporations, other entities, or even individuals. The group is organized independently by the entities that form it. A syndicate’s primary notable quality is that the groups within it work together to conduct some type of business in order to pursue…
What is Due Diligence in Project Finance? In the project finance business, deal origination happens through the direct relationship that relationship managers across different sectors enjoy in the industry. Proposals are presented in the form of appraisal notes put up to either the credit committee or a committee of senior management, whichever is the appropriate…
What is a Conglomerate? A conglomerate is one very large corporation or company, composed of several combined companies, that is formed by either takeovers or mergers. In most cases, a conglomerate supplies a variety of goods and services that are not necessarily related to one another. The newly-formed conglomerate becomes known as the parent company,…
What are Fixed Charges? Fixed charges, sometimes known as fixed costs or fixed expenses, are business expenses that occur periodically and are independent of the operational tempo of the business. It is in contrast to variable costs, which vary with business volume. Some examples of fixed charges include principal and interest payments on debt, insurance,…
What is Staple Financing? Staple financing is a financing package arranged by a seller for potential purchasers as part of an auction process. It is organized by the seller and their financial advisors, and it comprises the principal, fees, and the loan covenants. The term “staple” is derived from the fact that the commitment letter…
What is a Pitchbook? A pitchbook is a sales book used by investment banks to sell products and services, as well as to pitch potential clients. The purpose of a pitchbook is to secure a deal with the potential clients. It provides an overview of the firm, including historical information, financial strength, and services available…
What is a Negative Covenant? A negative covenant, also known as a restrictive covenant, is a covenant that restricts one party from carrying out certain actions. Sometimes the agreement involves some form of compensation to the party that consents to the restriction. Negative covenants are considered legal, but some of their provisions have been found…
What is Deal Origination? Deal origination, also referred to as deal sourcing, is a process used by finance professionals such as investment bankers, venture capitalists, and corporate development professionals to identify investment opportunities in the market. The goal of deal origination is to ensure a large volume of deals is obtained in a given period to maintain…
What is a Platform Company? A platform company refers to the initial acquisition made by a Private Equity Group in a specific industry or marketplace. The acquisition acts as the starting point for other acquisitions in the same industry. Platform companies create value by facilitating exchanges between consumers and producers of goods or services. For…
