Acquisition Line of Credit: 2025 Case Study

Global volumes reach $3.8 trillion, up 24% year over year, as buyers rely on private credit for speed, structure, and post-close flexibility. Lenders tailor terms and delayed-draw term loans become standard to cover deal fees and transitional costs. This enables sponsors to close faster and manage integration without heavy, fixed amortization during the first year. Working-capital lines are bundled with the acquisition package to smooth post-deal operations and prevent cash leakage during ramp-up.

From the compliance perspective, private credit packages tend to include explicit interest-only periods; 12 months is common before principal repayment begins. That cadence matches integration timelines: systems, vendors, and people shift; debt-service pressure during transition is undesirable. A cleaner P&L during the first year supports performance milestones and covenant management. I emphasize risk controls: clear triggers for DSCR tests, milestone-based covenants, and robust reporting to lenders who expect visibility into post-close plans.

The market shows the breadth of available capital. Private-debt funds offer larger, scalable loan structures than banks, albeit at higher pricing. This matters in cross-border or complex asset deals where senior debt, mezzanine or subordinated notes, and working-capital facilities are layered to optimize cost of capital and control of ownership. SBA-backed options still cover up to 75% of acquisition value for deals between $150k and $5M, but private credit now leads in speed and custom terms for larger, more complex transactions.

Buyers mix capital sources to balance risk, speed, and regulatory considerations. A real-world context shows how this plays out. Kimberly-Clark announced its $48.7B acquisition of Kenvue in 2025 as one of the era’s largest consumer-health deals. Financing complexity was high, with private credit elements complementing traditional equity and bank facilities to support a multi-year integration program. This is typical at scale: big names use private credit to preserve agility during regulatory and operational hurdles that accompany megadeals.

In 2024, a $4.2M tech-sector acquisition was financed with $2.5M senior debt, $1.2M subordinated notes, and a $500K working-capital line. The deal closed in September 2024 and illustrates recurring patterns: lean equity, a mixed debt stack, and a working-capital spine that keeps the business running through the transition. Even when numbers are modest, the financing architecture mirrors larger plays: flexible draw terms, staged liquidity, and a plan for integration costs that often exceed initial expectations.

Case studies show how terms translate into outcomes. Consider a cross-border example: Bakkavor Group plc (UK) acquired Greencore Group plc (Ireland) for $1.55B in 2025. Public data emphasizes deal size and cross-border nature, while financing layers in many transactions rely on private debt to bridge timing gaps between asset transfers, regulatory clearances, and operational ramp. Private-credit lines fund the acquisition premium, with a delayed-draw facility funding closing costs and initial working capital, followed by an interest-only period during the first 12 months to align with integration milestones. Regional market-share impact post-transaction materializes quickly; industry data show moves from 15% to 28% within six months in similar sector plays, as the new owner restructures procurement, logistics, and go-to-market channels with faster capital availability.

From the buyer’s perspective, speed and adaptability drive preference for private credit. Private equity sponsors increasingly favor private credit due to faster funding cycles and more predictable covenant treatment, reducing time negotiating with traditional banking partners. This translates into streamlined diligence, tighter documentation, and clearer alignment with SPV structures, keeping the deal timeline intact. Clients report high retention of new platforms after private-credit-funded acquisitions, about 96% in ome cases, reflecting post-close stability and management alignment.

On the cost side, private debt funds deliver larger loan amounts than banks and offer scalable structures for future add-ons or acquisitions. This is relevant for growth buyers who foresee additional tuck-ins within 12-24 months. Pricing remains higher than traditional bank debt, so sponsors must map milestone-based tranches, amortization schedules, and covenant frameworks to justify the incremental cost. In this ecosystem, delayed-draw term loans (DD TLs) manage timing risk: funds draw only when ready to close or fund a post-close milestone.

For practitioners, implications are practical. First, focus on integration-capable facilities: ensure the line includes an operational-asset component and a working-capital spine to fund supplier onboarding, IT systems migrations, and payroll transitions during the first year. Second, codify covenants around integration milestones, cost synergies, and revenue ramp that lenders can verify with transparent dashboards. Third, maintain a disciplined cross-border compliance approach: currencies, tax regimes, and transfer pricing influence funding speed and risk.

Note on data and sources: market context comes from multiple sources confirming the trend. Global M&A volume in 2025 was $3.8 trillion, up 24% year over year. The Kimberly-Clark-Kenvue deal remains a reference point for large consumer-health financing complexity. Cross-border activity such as Bakkavor’s acquisition by Greencore underscores the importance of flexible, scalable capital stacks in international deals. Private-credit case studies highlight a 12-month interest-only norm and the use of senior debt, subordinated notes, and working-capital facilities in balanced proportions. Industry analyses from J.P. Morgan, PwC, Goldman Sachs, Cravath, WilmerHale, and others consistently cite private credit as a fast, adaptable tool that complements traditional financing. The takeaway for deal teams is clear: acquisition lines of credit backed by private credit deliver speed, structure, and integration-capable capital. They support larger, faster deals without protracted negotiations with banks or covenants that choke post-close execution. Data points align with experiences from 2025 deals and case studies across sectors.

If evaluating an acquisition in 2025 or planning one for 2026, map a private-credit-driven capital stack that includes a DD TL, an interest-only period aligned to integration milestones, a robust working-capital facility, and clear reporting protocols to preserve post-close performance. Practical notes: evaluate private-credit partners offering flexible draw schedules, clear milestone covenants, and cross-border financing tracks. Build a financing plan that anticipates 12 months of interest-only payments, followed by staged principal amortization tied to integration milestones. Confirm SBA options where applicable (but do not rely on them for speed in larger acquisitions). Ensure your compliance program accommodates faster funding cycles without sacrificing controls. For more terms and deeper analysis, consult the Matactic glossary and sign up for our free M&A course. If ready to dive deeper, explore more case studies and term explanations in Clearly Acquired’s private credit series and the 2025-2026 M&A outlooks from leading firms. Peace out.