Acquisition Finance Trends (UK)

LexisNexis Practical Guidance has published “Acquisition Finance Trends (UK),” an article written by Akin Gump corporate partner Amy Kennedy. The article discusses acquisitions and related transactions trends as governed by English law; comparison in approach to U.S. markets; and addressing certain key commercial and documentation developments.

Among the topics:

Comparing U.K./ U.S. approach to acquisitions – “The United Kingdom (UK) approach to private acquisition financing differs to the U.S. market in that parties will typically satisfy (or have solely within the offeror’s control) all material conditions to the availability of financing at the time of signing the acquisition agreement. This is commonly known in deals documented under English law as a “certain funds” transaction.”

Inclusion of sanctions and anti-bribery or corruption compliance – “It has been standard to include specific provisions concerning sanctions and anti-bribery or corruption in facilities agreements, although the provisions do not naturally fall within those that are necessarily within the control of the borrower/offeror. It is now customary for certain fundsstyle transactions to, as a minimum, find these provisions included indirectly by way of the lender’s obligation to fund during the certain funds period being made subject to illegality, or otherwise by way of an “unlawfulness” major event of default.”

Impact of COVID-19 pandemic on the European leveraged loan and high yield markets – “[T]hrough 2021 we have seen a resurgence of the types of debt re-profiling experienced after the 2008 financial crisis (e.g., covenant resets and maturity extensions), and ultimately a continuing number of credits that require additional liquidity. The wave of full refinancings or restructurings has been slower to hit than expected – in a large part due to the level of short to medium-term amendments and waivers, as described above – but we expect these to hit through 2022.”

To read the full article, click here.