We’ve received a number of positive responses about our special series on add-ons. One partner at a NY-based private equity firm particularly liked our focus on why the right culture matters.

“The key is retaining talent,” he wrote us. “Even when it’s not apparent where they’ll be a fit. We had one executive who had been part of an add-on we did last year. He impressed us a lot, but I didn’t have anywhere to put him back then. But you never know so we kept him on in a consulting role.

“Then a couple months ago, we found a logistics company. Coincidentally our manager had an extensive background in that sector. It was a perfect fit, and he’s now running our platform company. The lesson is you never know when someone’s skill set will be a match for an add-on down the road.”

As we conclude our series on add-ons, we take a look at how lenders structure financings to support these acquistions.

In general, lenders are eager to finance add-ons. There are several reasons for this. First, they provide another bite at the apple in terms of fees earned on new transactions. They also allow new lenders to come into the credit, and existing lenders to increase their exposures. That’s particularly helpful for those accounts which had been underallocated in the initial syndication; they can now fill out their commitments.