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There was no question that Dominus Capital had secured the debt when it submitted its winning bid for Creative Outdoor Advertising this spring.

Alongside the private equity firm’s letter of intent to purchase the advertising services company was a negotiated credit agreement that defined the terms of TPG Twin Brook Capital Partners’ financing, according to 9fin sources. Dominus’ move had paid off — had it failed to win the bid, it would have been on the hook for around $150k in legal fees.

The backstory of this LBO could prove to be a bellwether for changing dynamics in the lower middle market space. Sources told 9fin that while rare, there have been other instances in recent weeks where sponsors requested credit agreements prior to entering exclusivity.

Negotiating the documentation this early in the process could cost hundreds of thousands in legal fees if the sale falls through. But a strained M&A environment is pushing private equity sponsors to consider shouldering the risk.