Private Equity Buyer Allowed to Terminate Merger Agreement Based on Seller’s Breach of Capitalization Representation
By Poiret Coulibaly, NYU School of Law ‘24
The Delaware Court of Chancery ruled on May 29, 2023, in HControl Holdings LLC v. Antin Infrastructure Partners S.A.S., that a French private equity firm had the right to back out of a $230 million merger agreement to buy a group of privately held Florida broadband companies due to the sellers’ breach of the capitalization representation under the merger
In December 2022, Antin Infrastructure Partners S.A.S and affiliate OTI Parent LLC (“Buyers”) entered into a merger agreement to acquire OpticalTel (“Seller”). The merger agreement included a closing condition that the fundamental representations, including the capitalization representation, were to be true and correct in all respects at closing.