AUSTRIA Law and Practice Contributed by: Philipp Baubin and Stefan Weber, Weber & Co
Weber & Co Rathausplatz 4 1010 Vienna Austria
Tel: + 43 1 427 2000 Fax: +43 1 427 2010 Email: vienna@weber.co.at Web: www.weber.co.at
1. Market 1.1 Major Lender-Side Players
tise from multiple lenders, making it possible to finance larger acquisitions that local banks may not be able to support alone. Direct lenders, including private equity firms and alternative investment funds, are less common but become increasingly visible in the acquisition financing landscape. They offer flexible financ- ing solutions that can be tailored to the specific needs of the acquiring company. Direct lenders often provide mezzanine financing, which sits between senior debt and equity in the capital structure, allowing companies to leverage their acquisitions without diluting ownership. This type of financing is particularly attractive for pri- vate equity firms looking to enhance their returns on investment. While debt funds may be an alternative player in acquisition financing, especially for mid- market transactions, this is seen less often in Austrian transactions than transactions abroad. These funds specialise in providing debt capital to companies for various purposes, including acquisitions. They can offer a range of financing options, such as senior secured loans, subordi- nated debt and unitranche loans. Debt funds are often more flexible than traditional banks in their underwriting criteria, making them an appealing
Local banks are often the first point of contact for companies seeking acquisition financing in Austria. They have a deeper understanding of the local market and can provide tailored financ- ing solutions that align with the specific needs of businesses. Local banks typically offer various loan products, including term loans and revolv- ing credit facilities, which can be structured to finance acquisitions. Their established relation- ships with local businesses and knowledge of regional economic conditions can facilitate smoother transactions and quicker approvals. However, due to size and risk considerations, Austrian banks are often only providing financing for small and medium-sized enterprises (SMEs). When it comes to larger acquisition finance transactions where the target is a large Austrian company, an Austrian group or an international group including Austrian subsidiaries, the acqui- sition financing or leveraged buyout (LBO) struc- ture, with the acquired company’s assets serving as collateral is usually provided by international financing syndicates consisting of renowned international and Austrian credit institutions. Their ability to offer syndication services allows them to pool resources and arrangement exper-
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