For the first time, the American Bar Association’s Private Target Mergers and Acquisitions Deal Points Study (the Study) includes data points on the use of representation and warranties insurance in transactions. The Study analyses publicly available purchase agreements for transactions for which purchase agreements were executed and/or completed in 2016 and the first half of … Continue reading
Back in April 2015, we discussed key questions to keep in mind when negotiating earn-outs, and looked at recent trends coming out of the American Bar Association’s 2014 Canadian Private Target M&A Deal Points Study (the 2014 ABA Study). As the ABA has now published its 2016 study (the 2016 ABA Study), we thought it … Continue reading
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
In an M&A transaction, several mechanisms exist in order to align the incentives of the parties and to reduce the risks assumed by each. From the perspective of purchasers, one important risk in a transaction is exposure to value leakage. A substantial amount of time can pass between the time deal terms are agreed upon … Continue reading
The threat of terrorism and its potential impact on companies should always be considered when negotiating M&A transactions in any country or environment. Acquirers are sometimes attracted to targets operating in volatile and hostile regions, as the risky environment can drive down valuations or share prices to create attractive investment opportunities. An extreme example would … Continue reading
In a perfect world, all issues as between a purchaser and a vendor of a business (whether assets or shares) are settled at the time of closing. Unfortunately, this is not how the real world operates, notwithstanding the level of due diligence conducted by a purchaser and its professional advisors. To protect against go-forward liability, … Continue reading
In negotiated acquisition agreements, representations and warranties provided by the seller are sometimes qualified by the knowledge of the seller. In such agreements, it is critical to clearly set out the standards as to what constitutes knowledge of the seller. According to the 2014 Canadian Private Target M&A Deal Points Study by the American Bar … Continue reading