Sponsor-side counsel on leveraged acquisitions and public-company take-privates. We structure the debt, commit the financing, and build the governance that has to hold after the deal closes.
The debt in a leveraged buyout is committed by letter before the purchase agreement is signed, and the two documents are drafted to the same conditions on purpose. Any condition in the commitment letter that is missing from the purchase agreement is a gap the sponsor fills with its own money or a reverse termination fee, usually the seller's only remedy for a financing failure. Conforming the two clause by clause is most of the work between the bid and the signature.
The debt then sits on the target, and that is the second risk. If the company fails, its creditors can attack the buyout as a fraudulent transfer, two years back under the Bankruptcy Code and four under most state statutes, on the theory that the company took on the debt while the money went to its former owners. A solvency opinion at closing is the answer, and it is obtained for that day.
A take-private adds the board's clock and a court's hindsight. We run the financing, the acquisition and the process as one matter, with one partner accountable from the first model to the delisting.
Holding-company and bidco structures, the debt-to-equity mix, security and guarantee architecture, and the tax design that keeps the debt efficient as well as available, all worked out together with the acquisition itself.
Negotiating commitment letters, term sheets, and the credit and security documents, with certainty-of-funds and conditionality drafted to match the acquisition agreement so the financing is committed on terms the deal can rely on at signing.
One-step mergers and two-step tender offers, proxy and Schedule TO disclosure, special-committee process, and the antitrust and securities clearances that gate a delisting.
Legal and financial diligence pressure-tested against the underwriting case, with the representations, indemnities, and conditions negotiated so the agreement allocates the risk the diligence surfaces rather than papering over it.
Rollover and incentive equity, vesting and leaver terms, and the shareholder arrangements that govern control and liquidity through to exit, structured so the management package aligns the operators with the thesis.
Board and reserved-matter design, the platform's acquisition runway for add-ons, and the reporting and covenant compliance that keep the portfolio company and its lenders aligned once the deal has closed.
Lenders commit on a short list: the acquisition agreement's closing conditions plus a few specified representations, with no market-out for the banks and no financing-out for the sponsor. The fee letter's flex terms let the arrangers change pricing and structure within limits to sell the debt, so a deal priced before flex is priced optimistically.
Large sponsor loans are often covenant-lite, with a single ratio test that springs when the revolver is drawn past a set share of its commitment. Middle-market loans still carry quarterly maintenance covenants, tested on a compliance certificate due a set number of days after quarter end. The regime decides how early a lender can act.
A two-step deal runs a tender offer, then a 251(h) merger with no stockholder vote once the offer clears the approval threshold; the target board answers on Schedule 14D-9 within ten business days. A one-step deal files a proxy, waits out SEC review and holds the vote. Insiders among the buyers add Rule 13e-3 disclosure.
Since Delaware amended Section 144 in 2025, a transaction with a controlling stockholder earns business-judgment deference with either an independent committee or a majority-of-the-minority vote, but a controller's going-private needs both. Management buyouts and sponsor deals with a rolling founder sit near that line, and the committee's record is what a court reads.
Representation-and-warranty insurance carries the indemnity in most sponsor deals, with a retention the buyer bears first and exclusions for anything diligence found or should have found. A known issue goes into an indemnity, an escrow or the price, not the policy. The underwriter writes those exclusions from the quality-of-earnings report and the legal diligence memo.
Management rollover is usually tax-deferred, incentive equity is restricted stock or profits interests, and a Section 83(b) election is filed within 30 days of grant for either. There is no extension and no cure. The shareholders' agreement sets the good-leaver and bad-leaver terms, and the covenant calendar starts running the day the wire clears.
The bidco stack, the debt-to-equity mix, and the security package are settled before the bid goes in. The commitment letter is negotiated in the same room as the offer, so the price the sponsor names is a price the debt will fund.
Purchase agreement and financing documents are conformed clause by clause: conditions, certainty of funds, reverse termination fee, remedies. Diligence findings go into the reps and indemnities, where they bind, instead of into a memo nobody reads at signing.
On a take-private, the deal moves at the pace of the target's board and the regulators: special-committee process, proxy or Schedule TO disclosure, antitrust and securities clearance, shareholder approval. Every step goes into a record that has to survive the review that comes later.
Funds flow, the ticker goes dark, and the deal becomes a company. Rollover and incentive equity vest into the shareholder agreement, the board and reserved matters take hold, and the covenant calendar starts running toward the exit.
In a leveraged deal the financing and the acquisition are one agreement wearing two sets of documents.
A leveraged buyout is an acquisition in which a sponsor funds most of the purchase price with debt secured against the target's own assets and cash flow, contributing a comparatively thin layer of equity. The structure amplifies returns when the thesis holds, but it also tightens the covenants, the diligence, and the documentation, because the lenders are relying on the business they have never owned to service the debt they are providing.
A take-private acquires a publicly traded company and removes it from the exchange, so the deal runs on the public-company timetable: proxy or tender-offer disclosure, fiduciary-duty review by an independent board or special committee, antitrust and securities clearance, and shareholder approval. A private acquisition has a willing seller across the table. A take-private has a board answering to dispersed shareholders and to the standards a court will later apply to the process.
We draft the bid structure, meaning the holding company and acquisition subsidiary, the debt-to-equity mix and the security package, before the offer goes in. We negotiate the commitment letter and fee letter with the lenders at the same time as the purchase agreement with the seller, and conform the two. We run legal diligence into the representations, the specific indemnities and the insurance policy, and we paper the management rollover and incentive equity with the shareholders' agreement that will govern the company to exit. One partner is accountable throughout, so the lenders, the seller and the management team hear one position.
Through three documents that have to agree. The commitment letter states the conditions on which the lenders will fund, kept to the acquisition agreement's own conditions plus a short list of specified representations. The purchase agreement states what the seller must deliver and what happens if the debt fails: usually a reverse termination fee as the seller's sole remedy, sometimes specific performance if the debt is in fact available. The equity commitment letter and limited guarantee from the fund stand behind the fee. If a condition appears in the first document and not the second, the sponsor has agreed to buy a company it may not be able to pay for.
The target's directors owe duties of care and loyalty to the stockholders, and a sale for cash puts them under a duty to get the best price reasonably available. Where a controlling stockholder or management is on the buy side, Delaware's 2025 amendments to Section 144 give a going-private its safe harbor only if an independent committee negotiates and a majority of the disinterested stockholders voting approves; a controller transaction that is not a going-private needs one or the other. Rule 13e-3 adds a written statement on the fairness of the deal and the reasons for it. We advise the sponsor on how to deal with a committee so that the record it builds survives the appraisal and fiduciary claims that often follow a take-private.
Rollover first. Managers who exchange target shares for shares or units of the sponsor's holding company can usually defer the gain under Section 351 or Section 721, depending on whether the holding company is a corporation or a partnership, provided the exchange is structured before the cash leg closes. Incentive equity comes next, as profits interests in a partnership or restricted stock in a corporation, vesting over time and on performance, with a Section 83(b) election filed within 30 days of grant. The shareholders' agreement then sets the leaver terms: fair value for a good leaver, cost or less for a bad leaver, and a call right the company can exercise on departure. All three are drafted with the exit in mind, because that is when they pay.
Structuring, term-sheet negotiation, and the governance and protective rights that travel with a non-control position in minority and growth-stage investments.
Explore →Platform-and-add-on strategy, with the repeatable acquisition runway, integration, and financing that compound a portfolio company into a larger whole.
Explore →Holding-period governance and the exit, including sale processes, secondary transactions, and the clean, well-papered record a liquidity event depends on.
Explore →Co-investment and club structures, covering allocation, control, and the inter-investor arrangements that govern capital pooled from more than one sponsor.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
One partner is accountable for the whole matter, and you have that partner's direct line. Chicago, London, and Dubai work to the same standard.