Hospital mergers have been an increasing trend in the healthcare markets over the past decade, with many proponents of these mergers believing that the overall consolidation of hospital services provides better outcomes for patients at large, and opponents arguing that these mergers only result in increased costs to patients. Over the last couple of years, there has been a slight decrease in the number of hospital mergers, in part due to the whirlwind of changes in society and the economy (i.e., the public health epidemic, increased interest rates and an unstable M&A market), but in large part as a result of drastic changes to the way we receive healthcare services (telehealth and telemedicine, outpatient treatment centers, ambulatory surgery centers, etc.). Although the number of hospital mergers has decreased, the deal size of these transactions has increased exponentially. So what can we expect to see in the future regarding hospital consolidations and what would increased hospital consolidation mean for patients?Continue Reading Hospital Mergers: The Value and Pitfalls
Jordan E. Hamburger is a partner in the Corporate Practice Group.
The Main Street Lending Program, intended to provide credit support to small and medium sized businesses, became operational on July 6, 2020.[i] It includes many borrower-favorable economic terms, including a 5-year term, a low interest rate (capped at LIBOR + 3%), an interest payment deferral of 1 year and a principal payment deferral of 2 years, and a generally borrower-friendly amortization schedule.[ii] However, the Main Street Lending Program possesses certain characteristics that could negatively affect an acquisition, sale or other strategic transaction.
Since making its initial announcement in March of 2020, the Federal Reserve has released a series of documents and Frequently Asked Questions (“FAQs”) to shape and clarify the program details. This article discusses several Main Street Loan requirements (around affiliation, dealing with other debt, compensation, dividends/distributions and employee and payroll retention) that require special attention if an M&A transaction of a privately-held company is being conducted or may be on the foreseeable horizon. This article also recommends some basic execution strategies since different approaches to M&A due diligence review and transaction structuring are necessary if the acquiror, the target/seller or both have applied for or received a Main Street Loan.
Continue Reading Some Strings Attached: Main Street Lending Program And Private Company M&A
On Thursday April 16, Sheppard Mullin submitted comments to the Federal Reserve about its terms sheets for the $600 Billion Main Street Loan Program. These comments raise and explore numerous important questions that the Fed and Treasury will necessarily need to grapple with to make the Main Street programs successful. We believe that these comments together with our comparative chart of the two Main Street loans being offered will help readers gain an initial understanding of how the Main Street Loan Program may work with companies’ existing debt and operations. We will provide updates when new information is released about the Main Street program.
Continue Reading Sheppard Submits Comments to Main Street Loan Program
With annual reports on Form 10-K publicly filed and first quarter earnings releases getting underway, proxy season – the annual practice of filing and distributing proxy statements, reserving meeting venues and courting shareholders – is now in full effect.
Continue Reading Virtual and Hybrid Shareholder Meetings in the Era of COVID-19: What Public Companies Need to Know