Tag archives: Representations and Warranties

Seller beware: sandbagging in Canadian private M&A

What is sandbagging? The practice of sandbagging—whereby a purchaser discovers a breach of a representation or warranty on part of the seller during negotiations but nonetheless closes the deal only to then seek indemnification for the breach—continues to plague practitioners in Canadian private M&A. In what is frequently one of the most contentious issues in … Continue reading

AIG reports increased R&W insurance claims in the M&A market

AIG, in its recently published 2017 M&A Claims Report, explored the rising number of representations and warranties (R&W) claims in the M&A market by examining AIG policies written between 2011 and 2015. Increase in R&W claims Mary Duffy, AIG’s global head of M&A insurance, posits that the marked increase in claims could stem from buyers … Continue reading

Picking it up for a song: deal considerations when purchasing a distressed business

Although a growing body of evidence—from job numbers to stock price figures—suggests that the Canadian economy is set for strong growth this year, there will always be companies (and industries) that get left behind for one reason or another. Where those companies that cannot meet their obligations have otherwise attractive assets, it presents an opportunity … Continue reading

2016: the year of sandbagging

One of the highlights from the American Bar Association’s (ABA) 2016 Canadian Private Target M&A Deal Points Study in which our firm was a key participant (the 2016 Study), was the increased inclusion of sandbagging provisions in deals. The 2016 Study saw the inclusion of sandbagging provisions in 46% of deals (up from 29% in … Continue reading

Protecting buyers in M&A transactions: trends in the use of indemnification provisions

Allocating liability between buyers and sellers for the business and operating risks of a target company in M&A transactions is key to assessing what might be an appropriate purchase price for the transaction. As a result, the indemnification provisions in a purchase agreement are heavily negotiated with buyers seeking to limit their post-closing damages and … Continue reading

Representations and warranties: environmental liability insurance

Buyers and sellers are using representations and warranties insurance more frequently in M&A transactions as a means to enhance bids in competitive auction processes and to limit exposure to post-closing indemnification liabilities. Representations and warranties insurance has been previously discussed on this blog generally (see here, here, and here), including how it can be beneficial … Continue reading

ABA 2015 Canadian Public Target M&A Deal Points Study – Key Takeaways (Part 2)

As discussed in our post last week, the American Bar Association (ABA) recently came out with its 2015 Canadian Public Target M&A Deal Points Study (the Study), tracking variations in the common terms and conditions found across acquisition agreements regarding companies listed on Canadian exchanges. The Study draws upon 88 acquisition agreements for the acquisition … Continue reading

ABA 2015 Canadian Public Target M&A Deal Points Study – Key Takeaways (Part 1)

On January 14, 2016, the American Bar Association (ABA) published its 2015 Canadian Public Target M&A Deal Points Study. The study draws from 88 deals announced in 2013 and 2014 that targeted companies listed on Canadian exchanges. Since 2006, this publication and its companion piece on private target M&A have been released annually by the … Continue reading

Webinar – M&A in 2015: Reps and warranties insurance

Buyers and sellers are using M&A representations and warranties insurance more often in transactions as a tool to enhance bids in competitive auction processes and to minimize exposure to post-closing indemnification obligations. This type of insurance is beneficial to both buyers and sellers in M&A transactions by providing access to the insurance industry’s capital and … Continue reading

Make it someone else’s problem: allocating risk in M&A transactions through insurance

During the course of an M&A transaction, it is often the case that the most hotly negotiated aspects of a purchase agreement are the representations and warranties and related indemnities. This is not surprising as these are the key devices used to address allocation of risk as between the parties, and by extension, price. While … Continue reading

Representation and warranties insurance: 2015 outlook

The Financial Post recently published an article highlighting legal innovations from the US that may see an upsurge of use in the Canadian landscape in 2015, including representation and warranties insurance (R&W insurance). South of the border, Law360 reported that the use of R&W insurance “exploded, with the market for the liability policy growing roughly … Continue reading

Seminar: Norton Rose Fulbright’s 7th Annual Mergers & Acquisitions School

On Wednesday, September 10, 2014 to Wednesday, October 22, 2014 from 6:30 pm – 8:30 pm (US/Central), Norton Rose Fulbright  will be presenting its 7th Annual Mergers & Acquisitions School for corporate, in-house legal, investment banking and private equity professionals in Houston, Texas. This comprehensive program is designed for participants that desire to develop a … Continue reading
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