Inside M&A - Summer 2013

IN THIS ISSUE

A Closer Look at Leveraged Dividend Recapitalizations

2013 Six-Month Credit Markets Trends

A View of the Bridge: M&A Bridge Loans Explained

What's in a Name?  In the Secured Lending World, Just About Everything

A Closer Look at Leveraged Dividend Recapitalizations

by Michael Boykins and Joseph L. Devaney

With merger and acquisition activity down over the course of 2012 into 2013, and a weak market for initial public offerings (IPOs), many private equity firms have turned to leveraged dividend recapitalizations (recaps) as a means to extract value from their portfolio companies and create partial liquidity for distributions to their limited partner investors.  A leveraged dividend recap may also be pursued when an equity investor seeks to realize value from its investment in a private company without selling or diluting its equity interests.  Unlike a typical dividend that is paid from a company's earnings, a leveraged dividend recap is