Third-party consents must be obtained in nearly all M&A transactions in the middle market of the aerospace and defense industry. The unique attributes of the seller and negotiations with the buyer will determine the specific third-party consents required for the transaction. In most cases, they fall into two primary categories:
- Regulatory consents: such as DOD, FTC, FAA, and CIFIUS.
- Commercial consents: such as banks, insurance companies, key customers, and key suppliers.
During our 22 years of selling middle market aerospace and defense companies, we’ve seen many different impacts third-party consents can have on a transaction. Third-party consents can cause substantial delays in the sale process and in some cases cause negotiations to collapse, as we have seen first-hand when a client’s key supplier was unwilling to provide consent.
Successfully navigating third-party consents requires thoughtful planning and a deep understanding of both the legal and commercial implications of each step. Accordingly, we advise our clients to collaborate with their legal and investment banking advisors, early in the sale process, to plan for the likely third-party consents that will be required to consummate the transaction.
Have a great day everyone,