Focus Media take-private explained

Author: Ashley Lee | Published: 4 Jul 2013
  • Focus Media's take-private was the largest take-private by a US-listed ChinaCo, largest LBO financing for a ChinaCo, and the first ChinaCo take-private to close amid an SEC investigation;
  • It included the rollover of an existing standby letter of credit (SBLC) and a capped cash sweep mechanism;
  • Founder Jason Jiang and the sponsors established an indemnity agreement in which he promised $140 million in support in the case of monetary penalties following the SEC investigation;
  • The documentation was heavily negotiated and is likely to be a template for future take-private transactions;
  • More Chinese banks and private equity sponsors will be involved in these take-private deals in the future.

Focus Media's $3.7 billion take-private marked a number of firsts for Chinese M&A. Its value, number of parties involved, and heavily-negotiated documents mean that it’s likely to be a template for smaller take-privates going forward.

The advertising conglomerate was the...