In this first episode of a two-part series, Deal-by-Deal podcast hosts Greg Hawver and Jeff Brooker discuss best practices for M&A deal letters of intent. 

Both hosts have seen deals tripped up by poorly crafted letters of intent. When buyers and sellers are unclear on what to include in an LOI, what is binding and what is not, and how to leverage exclusivity, deals can go sideways before they even get a chance.  

“It's a critical document, especially for independent sponsors,” explains Greg. “This is what you're showing to your capital providers, and it best describes the terms of their investment.”

Listen in for advice on crafting an LOI, including what terms to include in the letter, and missteps you should watch out for. It is just as important to understand what an LOI can be used for as it is to understand what LOIs can't be used for. Jeff shares that the time investment in a well written LOI is so beneficial that lawyers are typically happy to provide a review off the clock. 

Be sure to check out the second episode in this series, which will cover equity term sheets between independent sponsors and capital partners. 

Meet Your Hosts

Name: Gregory Hawver

Title: Partner at McGuireWoods

Specialty: Greg represents private equity and strategic clients in a wide variety of change-of-control transactions, minority equity investments, domestic and cross-border acquisitions, recapitalizations, joint ventures, and corporate reorganizations, as well as advising clients on day-to-day corporate matters. 

Connect: LinkedIn

Name: Jeff Brooker

Title: Partner at McGuireWoods

Specialty: Jeff focuses his practice on advising private equity funds, venture capital funds, and other institutional investors and strategic acquirers in connection with mergers and acquisitions, early- and late-stage investments, leveraged buyouts, recapitalizations, management buyouts, and secondary transactions.

Connect: LinkedIn 

Acquired Knowledge

Top takeaways from this episode 

• Balancing a desire for exclusivity without losing leverage can be a challenge. Once exclusivity is given to a seller, so is some of the leverage within that deal.
• The majority of an LOI is not going to be binding. An LOI includes the terms related to the purchase price, deal structure, and the party’s understanding of the deal at that moment in time, with the understanding that the deal may change.
• There are key terms an LOI should cover to avoid miscommunication. Work with your lawyer to ensure any LOI you’re putting together includes key terms. These include exclusivity and the structure of the transaction.

Contact

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This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action. 

You're listening to Deal-by-Deal, a McGuireWoods independent sponsor podcast. Deal-by-Deal invites you to conversations with experienced independent sponsors and other private equity professionals. Join McGuireWoods Partners, Greg Hawver, Jeff Brooker, and Rebecca Brophy as they explore middle-market private equity M&A to provide you with timely insights and relevant takeaways.

Welcome to Deal-by-Deal, a podcast for independent sponsors and others in the private equity community. My name's Greg Hawver. I'm a partner in the private equity group at McGuireWoods. I'm joined on this episode by my partner Jeff Brooker in our Dallas office, also in the private equity group. Today's episode is going to be the first part of a two part series where we talk about best practices for letters of intent. So this episode is going to focus on the letter of intent for the M&A deal, which is entered into by a buyer and a potential seller that talks about the high level terms of that acquisition. The second episode and part of the series will be a discussion of the equity term sheet where an independent sponsor hammers out the deal with the capital partners that are investing together with that independent sponsor. So with that, I'll kick it over to Jeff to give us a high level overview of some important points.

As we talk about all the points in these LOIs and how those potential pitfalls, I would encourage you, pick up the phone and call your lawyer. Call. We as lawyers are happy to review these LOIs typically off the clock for our clients and our prospects. It gets us an opportunity to know our new clients and what they're thinking about and how they like to do deals. It gives them an opportunity to see how we work and how we approach things. It's a great win-win for everybody. And so I would encourage folks, please reach out. We're happy to help.

So how do you balance as a buyer, those two competing interests of trying to get to exclusivity with a seller before someone else does? And also hammering out a meeting of the minds such that you can go to capital providers and show them that you do have a deal. And I think it's a little different if you're thinking about an independent sponsor trying to get to an ally as opposed to just a strategic or a traditional PE firm. But how do you think about that tension?

Yeah, I mean, that touches on a little bit of what I said about how specific do we want to be. When I'm representing a seller, I want to be very specific about all the terms that I care about. And so I want to hold the buyer's feet to the fire because once I give exclusivity as a seller, I've lost some of my leverage.

Totally agree.

And you don't want to start down the road, start spending resources on a deal and then have the buyer propose new or different terms than what you expected or if you punt on an issue. I think punting on an issue is probably most of the time more in buyer's favor than in seller's favor. Sometimes a buyer just wants to get the exclusivity and live to fight another day. And that is kind of an art of sometimes it's better to fight that battle under exclusivity to get it under exclusivity today and get the best deal you can later. Or maybe you need to do more diligence to truly understand and digest the issue to know how exactly how you want to document it. Or I mean, sometimes you understand as buyer that the leverage shifts in your favor once you get exclusivity and you feel it's better to fight that fight later. And that's exactly why when I'm on the sell side. I want to flush out those material terms. I don't want to fight that fight after that leverage shift has occurred. That's kind of how I think of level of specificity here.

Greg, anything, any further thoughts or anything to add there?

No, I totally agree with you. I think that when your average deal, all other things being held equal, the LOI, pre signature of the LOI, that's when the seller has more leverage and power, and then once exclusivity is given to the buyer, then it shifts a bit. And so if you're a seller, I think everything that's important to you, I mean you don't want to slow down the process by writing down every single deal term, but everything important you want to be set forth in the LOI and buyer is fine. There's an art to what to punt on and what not to. So great, thanks for covering that.

Let's talk about what should be binding and what is binding, what's properly binding and what's properly not because that's another one of the things that I think people, there can be some misunderstanding about. So maybe you want to grab that topic and run a little bit.

By and large, the majority of an LOI is not going to be binding and LOI is going to set forth terms relating to purchase price, structure, things like that that set forth the party's best understanding of the deal but the deal may change, but at the back of the LOI, there will be a provision that states which terms are binding in the letter of intent and the three primary topics. There are going to be exclusivity. If there's any confidentiality provisions in the LOI, they might be in a separate document, in a separate non-disclosure agreement, and also expenses, who is going to cover whose expenses. And so let's cover the exclusivity I think later on in this discussion. But yeah, those are the binding terms.

I get asked sometimes by folks, "Can I make this provision binding?" And what they're referring to are actual deal terms because they're afraid that the other party is going to re-trade on the terms of the LOI. And unfortunately you really can't. The LOI, when you're talking about deal terms and economics and structure, it's setting forth a mutual understanding and kind of a moral obligation. But I can't make it so that the terms that you put in the LOI themselves are actually enforceable and prevent a re-trade. And that's simply because it's just a summary that, these terms are just a summary of the terms and not the actual flushed out legal terms which you need definitive documentation for. Good example would be like for you think about preemptive rights. Everyone has an idea of what that means. The members in the LLC or the stockholders in a corporation, they get when the corporation or the LLC issues new equity, the equity holders get to buy their pro rata piece of that equity.

And so if I said preemptive rights in the LOI, we kind of know what that means. And as lawyers, we know what is customarily carved out because there's customary carve outs for things like the management incentive plan or rollover equity and an acquisition. But you typically wouldn't spell that out in the LOI, nor would you say, okay, well maybe the management equity wouldn't get preemptive rights, which it would be a custom, customarily they don't. And there has to be the company's going to offer the equity, then there's a certain period of time to exercise on it and then there's a process for how it's purchased and then there's a period of time for during which the company can sell equity that's not bought. And so all of that is baked into the concept of preemptive rights. But I can't... No judge would step in and say, well you two parties because you put preemptive rights in your LOI, have to agree to all these specific terms which I the judge am going to write.

So because that remedy is not available, the parties really do have to agree. And if they can't come to an agreement, then you ultimately just don't have a deal. And so I know that's a bit of a long-winded example, but I was hopeful that would be clarifying in that deal terms unfortunately can't really be made binding and they're not binding until we actually have definitive signed documents.

Yeah, completely agree with that Jeff. It is a moral authority type of dynamic, but it is pretty powerful. And it's interesting to think as you look at LOIs, there's some strategy there because you'd rarely have the parties agree to a five year restrictive covenant in an LOI and then one party just say, "No, actually I just want that to be three", even though it's just black and white, it was in the LOI five years. But there's a couple different provisions where parties will hedge and they'll say subject to ongoing review, et cetera.

And the interesting one I was going to touch on later, but a common approach when you're talking about purchase price, which is probably the most important term in LOI, is that parties will commonly state the purchase price as a hundred million for example and then they'll say that that's based on a 10 x multiple and they're assuming there's 10 million of EBITDA subject to ongoing review of the buyer. And so that's a provision where they're sort of a buyer setting up an ability to really scrub that EBITDA and potentially have an argument down the road that the purchase price should be lower and not be accused of a re-trade or of going against the spirit of what was agreed in the LOI. So yeah, agreed, there's an art to that and you definitely see that dynamic.

I usually try to get that one out as seller, but I mean the reality is that both sides, if EBITDA materially moves up or down, there's a risk of re-trading and that's because folks don't want to pay too much or leave a bunch of money on the table if the EBITDA is truly moved.

I understand why you want that out as a seller, but I see the logic of it as a buyer and I probably see it more often included than not.

Yeah, I agree. And always try to get it as a buyer, obviously.

Maybe we step through Jeff just sort of page by page what an LOI would look like. Some of the key terms that are usually covered from start to back. We're talking about exclusivity, which is at the back of the LOI usually. But first and foremost, one of the terms you'll see set out or not set out is the structure of the transaction. And as a buyer you're probably first thinking about what the purchase price is going to be and thinking about your headline number and many times the structure of the deal, and I'm talking about with structure, what is the legal form of the seller? Is it a corporation or LLC? What's the tax classification of that? And is this going to be a stock deal or an asset deal? And this is where many times I'll get an LOI from a client that had not talked to a lawyer beforehand and it states a purchase price and it just talks about an acquisition and it's not a stock or an asset deal.

Or sometimes Greg, it is even not consistent in the way that it speaks of kind of conflates equity terms with asset terms and just is not internally consistent.

Exactly. And I think that, and another thing, even if you spell out the terms, sometimes people will ask, "Well, what's the tax classification of the seller?" And we won't really know and we need to drill down and ask that question to really... I mean the goal is to get a meeting of the minds at this LOI stage. And I bring this up because if you're a target as a C corp and probably the most egregious example and your LOI just states it's an acquisition. In the buyer's mind, it's an asset deal and in the seller's mind it's a stock deal. Those are two very different transactions from the seller's perspective. Millions of dollars worth of a difference there depending on the different structures. I would say if possible and if strategically it works, you do want to talk about the structure. You want to reach out to a lawyer and have him or her reach out to their tax partner to just drill down, okay, these are the different parties, how they're classified from a tax perspective and it'll be an asset deal or stock deal, et cetera.

You can really stub your toe here if you don't do this right. Greg's example is one example, but there's a whole bunch of examples where if you don't get tax structuring right or the deal structuring right because maybe their taxes is always a concern, but there can also be regulatory consents, third party consents, other things to think about that we need to think about at this stage and try to make a transaction that's actually going to be feasible and that is tax efficient.

Give a quick overview of asset deal versus equity deal from a buyer's perspective and seller's perspective. Holding other things equal, which ones do you prefer?

So in an asset deal, your seller is the actual company and each of its subsidiaries that actually hold any assets. The buyers just buying assets and then typically only assuming very limited liabilities, typically the pre-closing liabilities remain behind with the seller and then any assets that aren't specified also remain behind with the seller. Seller then keeps its tax liabilities, it is more likely to require consents to transfer contracts and transfer any licenses or registrations. It's from a risk allocation perspective, it's better for the buyer and worse for the seller. The buyer will get a step up on the basis of the assets, but the seller, because the seller itself is the entity that those dollars, those purchase price dollars go into the entity and then they have to be distributed or give it ended up. And so if you've got a corporation, you can have potentially two layers of tax there and so it can be highly tax inefficient for a seller to do it that way if you're in a C corp.

In an equity deal, the sellers are the actual equity holders and they just sell the stock or the LLC units to the buyer. And then everything in that entity, both assets and liabilities as well as if it's a corporation, it's all of its tax attributes, all come with the company over tenants so the buyer inherits all of that. And then typically we've got in both deal structures, we have an indemnity structure, but there's no excluded liability concept where the pre-closing liabilities in an asset deal remain with the seller. In the equity deal, it's really just, if it's a breach of a representation or warranty, then there's an indemnity construct for it. If we find specific indemnities, known liabilities that we find in diligence, typically buyers will require sellers to indemnify for those.

But at risk allocation is a little bit better for the seller in an equity deal, but if you're in a C corp for instance, that double layer tax goes away. The buyer can get a step up in the tax bases of the assets for the cash portion of the purchase price in some deal structures with an equity deal, but not all. And so if that is something that the buyer's looking for, you really at that point, it really behooves you to reach out to council and make sure you're getting what you expect to get.

That was a great summary Jeff. As I like to think about it, I probably think about tax first when I'm thinking about structure because it's got to be generally workable. But then if I'm buyer, there's no third party consents, et cetera, there are going to be major issues. An asset deal is better. I sometimes say that you've won half the battle by moving to an asset deal as a buyer because it's pre-closing liabilities generally just stay with the seller. I often explain in stock deals your protection is, you're generally stepping into the shoes of all those liabilities so your protection is really the rep package that you're getting and so that's why you got to spend a lot of time on what are those reps and warranties.

Part of the difference there too is in the asset deal that the liability actually remains behind, whereas in the equity deal it actually moves over with you. And so third parties out in the world can actually look to the buyer in an equity deal or to the company and say, "No, you are the one who owes me this money." And then the buyer who has a right to indemnification needs to be able to collect on that indemnity from the equity holders. And that can be sticky because you've got, they are your management and a lot of times, and it's not easy to get folks to just cut you checks for things that they may have done, even if you've got them dead to rights.

That might be a good quick segue into, and I think it's a structural point, the rise of rapid warranty insurance that obviously that impacts how you're going to draft the LOI, it impacts risk allocation, it helps you not have to go to your role over sellers and your management, et cetera. Jeff, do you want to just speak a little bit about how often do you see an RWI in the marketplace and how does that impact negotiating the LOI?

Yeah, sure. I see it pretty much always if the enterprise value is over 30 million. Maybe always is a bit strong, but far more often than not in today's market. When it's under 30 million, I've seen it as low as even like 10 million but I think it becomes a harder and harder thing to justify the smaller the deal size and so I'd say under 30, it becomes probably less and less common as you get smaller and smaller. And then you want to know this up front whether you're going to get the rep and warranty insurance as part of the deal or if you're going to seek it because it really impacts the indemnity package. And typically the indemnity package is set forth in the LOI. So you're going to want to know which direction you're going and mention it specifically.

I have had some transactions that are small enough that they think, okay, well we'll pursue RWI but we're not necessarily going to get it or going to commit to it. And in that case, what I have actually seen sometimes in the LOIs is a bifurcated path. Let's say if we ultimately are able to get an RWI policy in place, this is how it's going to look for risk allocation and then if we don't, this is how it's going to look. And so you're not locked into either approach but you are locked into a package. You're going to choose from menu A or menu B based on whether the parties ultimately get RWI.

And one thing you do spell out of LOI typically on RWI is who's going to pay for it. What are you seeing on that front?

Yeah, I mean more often than not, I think in today's deal environment the buyer is paying for it. It's been a seller's market for a long time. That may be starting to turn as the economy starts to get a little shakier and the debt market start to get shakier that it starts to be shared more. I very rarely do I see seller pay a hundred percent. I either see in a deal that is an attractive deal with a lot of interest, if you're in an auction for sure as a buyer you're going to be paying for the RWI. If you've got a proprietary deal but it's a pretty attractive asset that otherwise would have a lot of interest, you're probably as part of your package going to have to pay for that as well. The assets maybe a little less attractive or maybe the sellers a little less sophisticated, then you might start to look to split the RWI cost. But I can count probably on one hand the number of times I've ever seen seller actually pay for it.

Yeah, I don't think I've ever seen that. I mean my council is usually if a buyer's able to just factor that ballpark cost into their purchase price and just, as you add up the other items then that a buyer's going to pay for it together with the purchase price, just fold that in and the buyer pay for it, it usually just reduces the friction because you're going to get asked to pay for it either way. Totally hear you.

One other question, I don't want this to become a total RWI discussion, but we typically decide at the LOI stage, if you're going with RWI, whether to do a no seller indemnity type of policy or sort a more typical construct where there's a 0.5% retention and escrows held for a short term? Jeff, what are you seeing on that front?

Yeah, so the retention, the total retention there would be typically 1% of enterprise value and then that the customary construct when that split is buyer will absorb the first half of that as the deductible and that's a true deductible. That only applies to breaches of ordinary reps where there is no fraud. So if there's fraud that sharing doesn't count and if it's a breach fundamental reps, then that sharing typically doesn't count either. So the first half a percent in ordinary reps with no fraud, typically the buyer will eat that. And then the second half typically will come from the sellers out of an escrow. Well, you'll hear referred to sometimes as a sliver escrow because it's pretty compared to like a 5% or 10% of enterprise value that the non RWI typical way of doing things. This escrow is a lot smaller.

How often are your buyer clients going out with a no seller indemnity approach where they're structuring the purchase agreement such that the buyer essentially pays that entire 1% retention and the seller doesn't have to leave anything behind in an escrow, not even half of the retention?

I guess I'd say I see it a lot both ways. And I counsel clients a lot of times. If they're on the fence about this issue, they should probably just give the no retention. It's not ultimately that much money. Build it in your price upfront if you can. It makes it much easier to negotiate the reps because the seller truly does not have skin in the game. Their council should be making sure that they're able to make truthful reps and they're not, there's no fraud, but the negotiation of the purchase agreement becomes much simpler as well as you never have to make an indemnity claim against your management. And if your sellers aren't going to be part of management, you can remove that consideration. But if they are, it's a real consideration that you don't even want to have to make a claim against them, even if it's for a small amount of money because it's still money that they otherwise would have and people don't like. Effectively, you're making a claim against them, which is not litigation, but it's litigation like and people don't like that and it has a risk of souring a relationship. And so if you think you can absorb that half a percent, I think it's often a good idea.

The flip side to that is if seller has no skin in the game on the reps, if you're worried about they're not going to care about the scheduling and they're not going to be invested in that, I mean there is that moral hazard there. If they've got competent advisors, I think the lawyers will typically keep them on the straightened arrow and make sure that they're not doing anything they shouldn't, they're providing all the diligence, being diligent in the way they schedule, et cetera. But that's the way I think about it. So I think short answer, I see it a lot both ways, but also goes back to leverage a lot and how attractive the asset is. Just like whether you're going to get RWI in the first place. If you're in an auction, you're probably giving this, if it's a really attractive asset, it's more likely than not. I think you're probably giving it.

I agree. I think it all comes down to leverage and how competitive the process is. I mean the other trend I'm seeing over the last handful of years in competitive processes, I would say in the more traditional RWI set up, if there was a breach of a fundamental rep that went above the RWI coverage, call it 10% or up to 20% of the enterprise value, then that excess, if it was a fundamental rep, the sellers would've to stand behind that and pay that. And a no seller indemnity approach, the buyer would essentially have to pay that overage over the coverage policy. So again, I'm seeing a lot of buyers just live with that risk of a potential fundamental rep breach and that they would be on the hook.

Jeff, do you want to step through maybe just a couple other terms in an LOI that are particularly noteworthy?

So we talked about structure, we talked about purchase price and then to the extent your purchase price has any structured items to it like a seller note and earn out, anything like that, we want to make sure that we are building that in with enough precision into the document that there's a meeting in the minds. Typically, the companies are bought on a debt free, cash free basis with an ordinary course, a level of working capital. So you're typically going to want to make that all clear in your LOI. Any type of employment and equity incentive arrangements for the go forward management to the extent that go forward management is part of the selling group, I think you want to lay that out as well. I mean you don't have to get into tremendous detail, but some detail. The non-compete, I think you want to make sure that in a middle-market private equity transaction, I see a five year non-compete from all sellers who are not institutional investors and are taking any material amount of consideration, I see that almost universally. You want to lay that out because some sellers will try to negotiate you down on that. And then as well as if there's anyone that is going to fight you on the non-compete, I'd like to know that upfront.

Exclusivity. Let's talk a little bit about exclusivity, Greg, because it's really, that is a super important point to make sure you get right.

And especially for independent sponsors. There's some additional considerations.

Yeah. As an independent sponsor, the reality is that if you don't have your capital provider locked down or you're not the kind of independent sponsor that has a very reliable source of capital that you've gone to many times before and are pretty sure that you can get it locked up again very quickly, exclusivity becomes very important because it now becomes, once you sign the LOI and the exclusivity clock starts running, it's really a race against time to get that capital provider locked down with their LOI and then they have to do whatever diligence they need and go through whatever process they need in order to be ready to fund when this is ready. So it's not uncommon at all for exclusivity to need to be extended when there's an independent sponsor because the capital's not coming together fast enough but you don't have a right to any more exclusivity than you're able to negotiate upfront. And so that dance is a delicate dance for every independent sponsor to dance here.

Let's go through a couple of the elements here. You want to bind your seller, but you also want to make sure that if you've got an equity deal, for instance, that your majority equity holders also bound by this. And remember that no one's bound to anything unless they actually sign the document. And so if you're going to have, ideally you'd have a majority equity holders sign this. If you're going to say that the company is the company and its equity holders, but you don't intend to get the equity holders to sign, you can have the company cause its equity holders. You say the company won't and it will cause its equity holders not to. And then you want to make sure you're covering every kind of financing and M&A deal in your language because you don't want them doing, even if it doesn't look exactly like your deal, you don't want them to out there doing another transaction that's going to make your deal difficult or impossible.

So we cast a pretty broad net on the types of transactions they can't do and they shouldn't be not just entering into agreements, but they shouldn't even really be having discussions. And so the language typically ends up being about a paragraph and usually you're going to get somewhere between 30 to 90 days. That's pretty unusual I think to get more than 90 days. And even that's kind of on the long side. And one of the things you can do to try to bridge a gap between what the seller is willing to give and what you think you're going to need is by building in milestones. If you can't get the exclusivity you think you're going to need, maybe we try to build in extensions that if I do certain things, I get an automatic extension. If I deliver a purchase agreement before a certain period of time, then I automatically get an... If we're having an auto extend, then it needs to be a black and white trigger and not something that's gray or subject to interpretation.

One other thing on exclusivity that is really important, a lot of times sellers ask to be able to terminate exclusivity on written notice to the buyer. And at that point you really don't have true exclusivity. It's kind of a losery because your seller at any point can cut it off. The part of the point of exclusivity is to keep that seller off the market for a period and to have an incentive to only work with you. And if something happens with your seller, then you have some time to try to talk them back into the boat. And if you don't have that, I think that's going to be prejudicial to your ability to get capital providers to really pay attention. And so that's the last point on exclusivity.

One other point I would note is make sure that expenses is a binding provision. I have seen things where someone is trying to get some type of expense provision, some type of cost sharing or shifting and it's not in the binding provisions of the LOI or maybe the LOI simply says at the beginning, this is a non-binding LOI. And then it never in the document does it say, except for sections X, Y, and Z, which are binding. Those provisions I would say, best to have an experienced M&A council look at your LOI. We are happy to do that at McGuireWoods. We're happy to do that typically off the clock. That's a good investment of time for us. It's very helpful to our clients and to our prospects. Your binding provisions are properly binding, your structure is working, et cetera.

Yeah, totally agree, Jeff. It's a critical document, especially for independent sponsors who together with the independent sponsors, track record and relationships, the independent sponsor is going out to market with this LOI and this is what you're showing to your capital providers and best describes the terms of their investment.

And if it looks inexperienced and amateurish, that's going to be prejudicial to your ability to get this funded too. It's going to make you look inexperienced. And one of these we can do is help clean it up and make it look like it should for a sophisticated set of parties. And so it's another reason to just counsel, spend a few hours on this and get it right. It's going to increase the chance that you get your deal funded. I think very me.

Absolutely. And definitely feel free to reach out to myself or to Jeff. These LOIs, in addition to being important they're also kind of the fun part of my job and Jeff's job because you're looking at a new deal and you're structuring it and you're just putting thought on these high level points. So well with that, I think this was a really helpful summary of this key document.

Jeff, thanks for joining and walking through it. Appreciate your time and appreciate all of our listeners' times. We'll talk to you on the next podcast. See you Jeff.

Thanks Greg.

Thank you for joining us on this episode of Deal by Deal, a McGuireWoods independent sponsor podcast. To learn more about today's discussion and our commitment to the independent sponsor community, please visit our website at mcguirewoods.com. We look forward to hearing from you. This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.