Practical Law Glossary Item 8-382-3835 (Approx. 2 pages)
Glossary
Stapled Financing
Also known as stapled papers. Business jargon for a pre-arranged financing package offered to potential bidders in an acquisition. Stapled financing is arranged by the investment bank that is advising the seller in an acquisition and includes a commitment letter (signed by the arranger but generally not the bidder) and a term sheet containing the principal terms of the financing. The commitment letter and term sheet are stapled to the back of the acquisition sales materials distributed by the sell-side advisor, hence the name "stapled papers" or "stapled financing."
Stapled financing was developed to expedite the bidding process; the buyer does not have to spend as much time seeking financing but can use the pre-arranged financing that is already available. Typically, stapled papers are not thoroughly negotiated unless the bidder wins the bid to acquire the target company.