Bass, Berry & Sims attorney Katie Smalley authored an article for Mergers & Acquisitions providing insight on how dealmakers should prepare for business transactions by having their financing documents in order ahead of time.
Financing conditions can create friction that slows the ability to deploy capital, so it is important for borrowers to focus on building flexibility early on to pursue opportunistic M&A under their financing documentation. Katie discussed the roles that permitted action flexibility, target financial integration, and acquisition debt capacity all play in determining the ease of fulfilling the borrower’s M&A strategy based on the framework of the lending conditions.
“While the ability to consummate acquisitions remains a fundamental concern for borrowers and sponsors, flexible financing options can be equally critical to the feasibility of executing the borrower’s M&A strategy,” said Katie.
The full article, “Get the Green Light Before the Deal” was published in the September/October issue of Mergers & Acquisitions and is available online.