Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Loan Covenant Trap That Cost a Seller 22 Million
In episode 176 of The Acquisition Talk, Lucas and Luna dissect a deal that went sideways not at closing, but six months after, when the buyer's lenders triggered a loan covenant breach. The seller had agreed to a post-closing financial covenant tied to the acquired business's EBITDA, and a modest shortfall triggered a default that wiped out the seller's remaining earnout and led to a clawback of the purchase price. The hosts explain how a seemingly standard covenant in the buyer's credit agreement became a leverage tool, why sellers need to understand the buyer's…
The skinny
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