Use case · acquisition capital
Buy the competitor with your own equity
The shop down the street is for sale. An acquisition loan and a PE bid both want a slice of the company. Equity in buildings you already operate is the account that does not dilute the operating company.
Written by Dwaine Clarke , Founder & Principal Broker, American Net Lease, LLC Reviewed
On this page: The situation · How capital is sized · The alternative · Timeline · Example · FAQ
The situation
The target is priced. Your borrowing capacity is already spoken for.
Auto-service operators see rollups buying the competitor. Restaurant franchisees see a neighboring franchisee list. Industrial owner-operators see the plant next door come up when a family wants out. In each case the constraint is cash at close, not whether the location is worth running.
An acquisition loan stacks a guarantee on the same credit that already carries the open shops. Private equity buys a slice of the company to fund the close. Both can work. Neither is the same as converting dirt you already own into a check that does not dilute control of the operator.
This use case shows up most often in Auto service & collision , Restaurants & QSR franchisees , and Industrial . Size a first pass in the sale-leaseback calculator, then request a Portfolio Capital Analysis.
How the capital is sized
Size the owned book first. The target is a second model.
Proceeds come from leases on shops you already operate. Coverage on those shops has to survive after the sale and after you take on the target's occupancy cost. Do not set rent on the owned book as if the acquisition's upside is already in the till.
The target may be leased, owned, or a mix. If you want that building too, it is a separate deed and a separate decision. The analysis ranks the owned roofs that can fund the close; it does not invent a price for the competitor.
The sale-leaseback calculator is a first pass on the owned book. The Portfolio Capital Analysis is where owned coverage, existing debt, and what the capital is supposed to do get written down.
The alternative you'd reach for
Sale-leaseback versus an acquisition loan or a PE bid
Acquisition loan / PE
An acquisition loan keeps every deed and adds leverage. PE keeps the deeds inside a larger capital structure and takes equity, control rights, and an exit clock. Both are company-level capital.
A sale-leaseback is building-level capital. You sell the fee, you keep operating, you do not sell a membership interest in the company. American Net Lease does not make acquisition loans and does not write PE checks. The PE comparison is the full side-by-side on dilution and control.
Some operators do both: sell a first tranche of owned roofs, then borrow or take a smaller equity check for the rest. That only works if the owned book still covers rent after the close.
Timeline
Read the owned book before you mark up the target.
A Portfolio Capital Analysis is offered within 48 hours of a complete submission. Shop count, current debt, last year's earnings, and what the capital is supposed to buy are enough to start.
The target's occupancy cost does not get to steal coverage from the roofs you are selling.
Two closings, two diligences. Do not promise a buyer of the lease that the competitor deal is already done.
Worked example
A five-shop operator, three owned, one competitor listing
Illustrative — not a closed transactionQuestions
Acquisition-capital FAQ
Can I sell the owned shops and buy the competitor's building in the same breath?
You can decide both. They are still two deeds and two clocks. The analysis ranks the owned roofs that can fund the close. It does not assume the target's building is part of the same sale.
Will a buyer care that I am using proceeds to buy a competitor?
The buyer is underwriting the lease on the shops they are purchasing. What you do with proceeds matters only if it threatens coverage on those shops. That is a remaining-operator credit question, not a story about the target.
Is this cheaper than taking PE?
It is a different cost. PE costs equity, control, and an exit. A sale-leaseback costs residual ownership of the dirt and a rent obligation. Which is cheaper depends on how much capital you need and how much of the company you are willing to sell.
How do I start?
Request a confidential Portfolio Capital Analysis. Shop count, current debt, last year's earnings, and what the capital is supposed to buy are enough to start. Call (239) 236-2626.
Get a confidential read on what the owned shops can buy.
Shop count, current debt, last year's earnings, and what the capital should do are enough to start.