Acquisition Financing in M&A Transactions: Reconciling Deal Terms With Finance Terms and Closing Conditions

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Wednesday, August 31, 2022

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE course will discuss the challenges of closing an M&A transaction on terms consistent with the requirements of an acquisition lender. The panel will explain how each aspect of the acquisition and the acquisition financing impacts the other, and the role of the buyer, the seller and, if different, the target company in successfully closing a financed acquisition.

Description

In fact, the success of an M&A transaction often hinges on satisfying the demands of a lender financing all or a portion of the purchase price. Specifically, the buyer and seller must take steps to avoid a scenario where the conditions precedent to the buyer's obligation to close the acquisition are met, but the conditions to the lender’s obligation to fund the loan are not. Our panel will discuss the scope and content of customary financing conditions and the importance of the loan commitment expressly listing such conditions and providing that there are no conditions to funding other than those so expressly listed.

We also will look at how the structure of an acquisition dictates certain factors for financing, including collateral perfection, the identity of the guarantors and borrowers, and timing of the acquisition, as well as examine the provisions in an acquisition agreement that are most important to lenders, such as those specifically related to the financing and the lender, representations regarding the seller and target (if different), the indemnities provided by the seller, and any anti-assignment or transfer provisions.

Listen as our panel discusses the challenges of closing an M&A transaction on terms consistent with the requirements of an acquisition lender and explains how each aspect of the acquisition and the acquisition financing impacts the other.

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Outline

  1. Role of acquisition lender in M&A transactions
  2. Loan commitments
  3. Structure of transaction: impact on financing terms
  4. Reps and warranties: MAC clauses
  5. Interaction of acquisition loan with other loans: intercreditor agreements
  6. Purchase price adjustments and earn-outs
  7. Indemnities: seller and buyer

Benefits

By reviewing these and other key issues, the panel will answer the following questions:

  • What should the parties in an M&A transaction do to ensure that their closing requirements are in sync with those of the acquisition lender?
  • How might the deal terms and final financing structure of the entity affect the terms of an acquisition loan?
  • What kinds of representations and warranties will a lender require from the seller and the target and how do MAC clauses come into play?
  • What provisions should be included in an acquisition agreement to anticipate indemnities and other post-closing requirements of the acquisition lender?

Faculty

Schernecke, Matthew
Matthew Edward Schernecke

Partner
Hogan Lovells

Mr. Schernecke advises direct lenders, mezzanine investment funds, and venture capital investors in a variety of debt...  |  Read More

Stein, Robert
Robert J. Stein

Partner
Goodwin Procter

Mr. Stein practices in the firm’s Debt Finance and Private Equity groups. His practice focuses primarily on...  |  Read More

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