Glossary

A statutory merger is a legal combination of two or more companies whereby one company absorbs the other, resulting in the continuation of the survivor’s corporate identity. This process often includes the assumption of assets, liabilities, and obligations of the absorbed entity. The merged entities operate as a single company and are governed by the laws of the jurisdiction in which they incorporate, making it a formal and heavily regulated approach to consolidation.

Bridge financing is a temporary form of funding that helps a company meet short-term financial needs until it secures more permanent financing or reaches a predetermined milestone. This type of financing is typically crucial in the context of mergers and acquisitions, where timing can be everything. By allowing a firm to access needed capital quickly, bridge financing helps entrepreneurs and investors capitalize on opportunities that would otherwise slip away while waiting for long-term funding solutions.

A go-private merger is a transaction in which a publicly traded company is taken private, often by its management or a private equity firm. In this process, shares of the company are bought back from shareholders, thereby delisting the company from public stock exchanges. This approach is typically pursued to allow the company to operate with greater flexibility and to implement long-term strategies without the pressures of quarterly earnings reports.

Title insurance is a type of insurance that protects property buyers and lenders from financial loss due to defects or issues with the title of a property. These issues can include undiscovered liens, claims of ownership, fraud, or disputes over property boundaries. By securing title insurance, we ensure that our investment in real estate is protected from unforeseen title problems that could jeopardize our ownership.

A take-private bid is an offer made by a group, often led by private equity firms, to purchase all outstanding shares of a public company, effectively transforming it from publicly traded to privately held. In essence, it involves the buyer negotiating to acquire all shares, typically at a substantial premium, to gain full control and remove the scrutiny and obligations that come with being a public entity.

Disclosure schedules are documents that accompany a purchase agreement in a merger or acquisition deal, detailing specific facts, figures, and representations that the seller must affirm. They serve to provide transparency about the target company’s legal, financial, and operational conditions, ultimately protecting both parties by clarifying potential liabilities and obligations.

A transitional service agreement (TSA) is a contract that outlines the terms under which one party provides services to another for a specified period following a merger or acquisition. This agreement is crucial for ensuring a seamless transition as it often covers support in areas such as IT systems, HR functions, and other operational aspects that need to be aligned post-transaction. In simple terms, a TSA helps both parties maintain business continuity and stability during a time of change.

Credit committee approval refers to the formal consent required from a designated group within an organization, typically within financial institutions, that oversees and evaluates credit risk and lending decisions. This committee plays a crucial role in assessing loan applications, ensuring that they align with the organization’s risk management policies and credit guidelines. By obtaining this approval, companies can proceed with transactions that entail significant financial commitments while also safeguarding their financial health.