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

Description

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 will also look at how the structure of an acquisition dictates certain factors for financing, including collateral perfection, the identity of the guarantors and borrowers, and the 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 authoritative 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.