closely evaluate supplier and customer contracts, focusing on pricing flexibility, cost pass-through rights, and termination provisions that could affect profitability if costs increase. Understanding how these factors could impact margins and EBITDA has become an essential component of valuation analysis and risk allocation. Finally, the continued expansion of private credit has broadened financing alternatives for acquisitions and growth initiatives. While these solutions can provide greater flexibility than traditional lending structures, companies should carefully assess all-in financing costs, covenant flexibility, liquidity protections, and downside resilience. Financing structures that can accommodate cyclical performance, supply chain investments, and future growth initiatives may prove increasingly valuable in a market where execution certainty remains a key differentiator. Companies that proactively address AI-related risks, tariff exposure, contractual flexibility, and financing considerations early in the deal process will be better positioned to protect value, allocate risk appropriately, and successfully execute transactions in a market that continues to reward preparation and adaptability.
For a deeper analysis, see the article by David Harper and Brian Sims of Bass, Berry & Sims, “Industrial M&A in 2026: What Dealmakers Should Watch,” published by Industry Today.
Acquiring a Unionized Facility? The Successor Bar Is No Longer an Obstacle
Contributors: Hunter Yoches and Tim Garrett
Federal labor law has long treated a change in ownership of a unionized employer as imposing on the purchaser a bargaining obligation if that purchaser met the legal definition of a successor employer. Under this doctrine, although the successor employer was not automatically bound by the predecessor’s union contract, the National Labor Relations Board (NLRB) imposed a legal presumption that the incumbent union’s majority status continued after the acquisition, triggering the successor employer’s obligation to recognize and bargain with the incumbent union. For many years, and most recently since 2011, once the bargaining obligation attached, the buyer was required to recognize and bargain with the incumbent union for a “reasonable period,” which could last up to one year. During that period, neither the employer nor the employees, and not even a competing union, could challenge the incumbent union’s presumed majority status. This doctrine also prohibited the employer from unilaterally withdrawing recognition based on a claimed loss of majority support. This one-year ban became known as the “successor bar” doctrine. But now, that legal presumption – the successor bar doctrine – is gone. A federal appellate court recently invalidated the successor bar, holding that the NLRB cannot prevent a successor employer from challenging an incumbent union’s majority support and withdrawing support during the one-year period after a change in ownership. While this decision does not eliminate the broader successorship doctrine, it returns to purchasers of unionized operations a valuable option and underscores the need to address labor issues early in the transaction process. Successor employers have regained a tool to challenge majority support, but a wise buyer must understand what the tool does, and importantly, what the tool does not do. That is, the buyer likely will still initially inherit an obligation to recognize and bargain with an incumbent union if it meets the criteria to be considered a successor employer. However, the buyer – if a successor – is no longer automatically prohibited from relying upon objective evidence that the union has lost majority support and, based on that rationale, withdrawing recognition and refusing to bargain further.
Going forward, a prospective buyer should continue to identify each bargaining unit, how and when the union obtained
3 MANUFACTURING & INDUSTRIAL: OUTLOOK & TRENDS |
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