Our special series on envelope-pushing in the world of loan covenants continues with a look at “limited condition transaction” provisions. These provisions allow the borrower to decide, at its option, when it wants to test the conditions to entering into a transaction (typically an acquisition) that is not subject to a financing condition – sometimes…
As we continue our special series on covenants, we’ve noted how lenders and sponsors are pushing envelopes to deal with an increasingly competitive landscape. This includes areas of the credit agreement that might otherwise appear innocuous. Take financial statements. Quarterly numbers are typically due within 45 days after fiscal quarter-end, and annuals within 120 days…
Growing competitiveness in the buyout market is resulting in a variety of pressure points being applied by private equity sponsors to the lenders who finance their deals. Lines are blurring in the steps between buyers and financing sources – term sheet to commitment letters to credit agreement. Today, corporate finance attorneys tell us, a detailed…
Much attention was paid over the past few weeks to a dramatic series highlighting the struggle between two powerful forces, a dizzying game for world domination, with the outcome hanging in the balance and viewers on the edge of their seats. Of course we’re talking about our recent series on valuations (“Why Valuations Matter” [link])….
A beluga whale was found last week in the Arctic Ocean off the northern Norwegian coast. Otherwise not an unusual event, but this particular cetacean wore a harness. Its proximity to Russia sparked rumors the animal had been recruited as a spy. Another theory, however, soon surfaced. Some surmised “Hvaldimir” was an escapee from a…
“There are two times in your life when you shouldn’t speculate: when you can’t afford to, and when you can.” – Mark Twain Intergrowth 2019 this week in Orlando came at a propitious time, at least as far as our lender survey on valuations goes. One long-time NYC-based middle market practitioner weighed in with a…
“Only those who will risk going too far can possibly find out how far one can go.” –T.S. Eliot So far in our special series on valuations we’ve reviewed key variables that impact equity valuations, and the strategies private equity has used to address them. We’ve also shared sponsors’ perspectives on challenges of higher purchase…
“Doubt is not a pleasant condition, but certainty is absurd.” –Voltaire The story of value is the story of private equity. How these firms have grown businesses and sold them for superior shareholder returns is about value creation. The paths to creating value and achieving these returns differ for each sponsor. As we discussed last…
“The value of a thing sometimes lies not in what one attains with it, but in what one pays for it – what it costs us.” – Friedrich Nietzsche In last week’s installment of our continuing special series, we discussed how critical time is to driving value. This week we take a deeper look at…
“Time is the longest distance between two places.” – Tennessee Williams One of the most important variables impacting valuations is how much time sponsors have to effect strategies to improve company performance. According to Preqin, the hold period for private equity GPs worldwide was 4.5 years last year – down from 5.9 in 2014. The…