Key Points:
A loan to own transaction is the acquisition of a
secured debt position in order to influence control and ultimately
acquire ownership of a target business (and its
assets).
"The M&A year has been defined by
"loan-to-own" takeovers, standoffs between shareholders
and boards on company valuation, and increased regulatory scrutiny:
dynamics that will continue into 2013." (M&A
loan-to-own deals here to stay, James Eyers, Australian
Financial Review, 5 December 2012).
Loan to own transactions are becoming more and more common
– but what do they involve, and when are they appropriate? In
this two-part article we give a basic description of a relatively
straightforward loan to own transaction, and some practical tips to
assist you in evaluating and ultimately structuring and
implementing a loan to own transaction.
