Sponsor-Strategic Partnerships in M&A: Structuring Challenges, Bidding Concerns, Exit Strategies

Recording of a 90-minute premium CLE webinar with Q&A


Conducted on Wednesday, July 8, 2020

Recorded event now available

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Program Materials

This CLE webinar will discuss the issues specific to sponsor-strategic partnerships formed to facilitate M&A deals. The panel will explore the advantages of these alliances and the questions regarding governance, decisionmaking, bidding, and essential considerations regarding exit strategies.

Description

Innovative strategic buyers and private equity sponsors are increasingly partnering to facilitate acquisitions. Still, while private equity sponsors acquire companies with an eye toward a shorter-term return and exit, strategic buyers may be more concerned with integrating the acquired entity to expand their capabilities within a specific sector. While such sponsor-strategic buyer alliances can create value for both parties, they and their counsel should consider several issues before proceeding.

The partnership agreement should contemplate how to handle the governance, management, and decisionmaking authority post-acquisition. Counsel should draft board composition, veto rights, and exit provisions to address the different roles and objectives of the parties. Because negotiations may occur during the bidding process, the parties must have an understanding of their goals upfront. It may also be necessary to consult with the principals of the target company, further complicating the process of getting to a final agreement.

The sponsor must be aware of antitrust and regulatory issues that may arise when it combines forces with a strategic buyer who may be a competitor with the target. The combination may also present securities disclosure issues where the buyer or target is a public company.

Listen as our authoritative panel discusses the benefits of sponsor-strategic alliances in pursuing an acquisition and the operational, exit, and other concerns to address in the partnership agreement and acquisition process.

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Outline

  1. Benefits and risks of sponsor-strategic partnerships
  2. Elements of a successful sponsor-strategic partnership
    1. Developing a joint business plan
    2. Establishing rules of governance
    3. Agreeing on an exit strategy
    4. Involvement of target?
  3. Key partnership provisions
  4. Bidding strategies in the M&A process
  5. Antitrust and other issues

Benefits

The panel will review these and other key issues:

  • How does the strategic buyer benefit from partnering with a PE sponsor? How does a sponsor benefit?
  • How should the partnership agreement address the differing goals of the sponsor and strategic partners in acquiring the target?
  • What should the partnership agreement say about bidding and communications with the target?
  • What are the critical exit provisions to include in the contract?

Faculty

O'Neill, Rita-Anne
Rita-Anne O'Neill

Partner
Sullivan & Cromwell

Ms. O’Neill serves as Co-Head of the firm’s Global Private Equity Group. She has a broad-based practice...  |  Read More

Reenan, Neal
Neal J. Reenan

Partner
Latham & Watkins

Mr. Reenan advises clients on complex domestic and cross-border transactions and related corporate matters. He focuses...  |  Read More

Stebbins, Ann Beth
Ann Beth Stebbins

Partner
Skadden Arps Slate Meagher & Flom

Ms. Stebbins concentrates primarily on mergers and acquisitions. She spent eight years in the firm’s London...  |  Read More

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