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What's Market?

Whether your company is buying, selling, combining, or separating business entities, it’s important to keep informed of what’s going on in the M&A world in order to make the best decisions for all stakeholders.  What’s market is your resource for M&A information. From providing you with the latest terminology or keeping you updated on the latest deals and trends, what’s market is your resource for staying informed.

Trends in M&A Provisions: A G&S Series in Conjunction with Bloomberg Law

If you’re new to M&A or just need a refresher course, our Trends in M&A Provisions series offers insight into the trends and usage of relevant terms and provisions within M&A transaction documents.  See below for more information.

2018 Trends in M&A Provisions: Updated Bloomberg Law Articles

Trends in Private Company M&A Provisions: The “Materiality Scrape”

In terms of apportioning responsibility for a target company's liabilities as between buyer and seller in an M&A transaction, a "materiality scrape" can be one of the most important provisions within the transaction documents. And yet this provision-and its significance to the overall risk profile of an M&A transaction-is often not fully unerstood. 

Read more.

Trends in Private Company M&A Transactions: Target Counsel Legal Opinions

In all types of business transactions, the parties rely heavily on their own counsel to negotiate business and legal points, and to draft the transaction documentation to reflect the agreed upon terms. In addition to relying on due diligence on the representations and warranties contained in the transaction document, often one party will require a written legal opinion from counsel to another party as a condition to the closing of the transaction.

Read more.

Target Counsel Legal Opinions

Trends in Private Company M&A Transactions: "10b-5 Representations"

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (e.g., asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations and warranties that the seller makes with respect to the target company.The scope and detail of these representations and warranties are often heavily negotiated and tailored to reflect not only the nature of the target and its business, financial condition, and operations, but also the relative negotiating strength of the buyer and seller. 

Read more.

Trends in M&A Provisions: Stand-alone Indemnities

In private company mergers and acquisitions (“M&A”) transactions, the indemnification provisions of a definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) stand out in importance for both buyers and sellers.

Read more.

 

Archived Articles

Intentional Breach Exclusions in Private Transactions 

An M&A purchase agreement will include representations from the seller to the buyer, and vice versa. However, since the seller’s representations will normally be broader in scope and substance than those of the buyer, it is usually the seller who is more interested in limiting the representations within the purchase agreement.

Read more.

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Alternative Dispute Resolutions (ADR) Provisions

An M&A purchase agreement will include representations from the seller to the buyer, and vice versa. However, since the seller’s representations will normally be broader in scope and substance than those of the buyer, it is usually the seller who is more interested in limiting the representations within the purchase agreement.

Read more.

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Financial Statement Representations

In 2005, 2007, 2009, 2011, and 2013 the American Bar Association (ABA) released its Private Target Mergers and Acquisitions Deal Points Studies (the ‘‘ABA studies’’). The ABA studies looked at the M&A agreements of publicly available transactions that occurred in the year prior to each study.

Read more.

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"No Other Representations" and Non-Reliance Provisions

An M&A purchase agreement will include representations from the seller to the buyer, and vice versa. However, since the seller’s representations will normally be broader in scope and substance than those of the buyer, it is usually the seller who is more interested in limiting the representations within the purchase agreement.

Read more.

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Exclusion of Consequential Damages

Buyers and sellers often negotiate the scope and types of damages covered by the indemnification obligations, including whether consequential damages suffered by the buyer as a result of the seller’s breach under the purchase agreement
should be included in—or excluded from—the seller’s indemnification obligations.

Read more.

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Target Types

In 2005, 2007, 2009, 2011, and 2013 the American Bar Association (ABA) released its Private Target Mergers and Acquisitions Deal Points Studies (the ‘‘ABA studies’’). The ABA studies looked at the M&A agreements of publicly available transactions that occurred in the year prior to each study.

Read more.

 

Damage Mitigation Provisions

The indemnification obligations under an M&A purchase agreement generally pertain to breaches of the representations, warranties and covenants of the respective parties, but sometimes also apply to other legal or business matters on a ‘‘standalone’’ basis, regardless of whether such a breach has occurred.

Read more.

 

After-Tax Indemnity Limitations

An after-tax indemnity limitation reduces the liability of the indemnifying party to the indemnified party by an amount intended to take into account any tax benefit received by the indemnified party on account of the underlying claim.

Read more.

 

Compliance with Laws Representations

The compliance with laws representation is usually abroad representation not focused on any specific aspect  of non-compliance or any particular set of laws or regulations.

Read more.

 

Insurance Reduction Provisions

The indemnification obligations under an M&A purchase agreement generally cover breaches of the representations, warranties and covenants of the respective parties, but sometimes also apply to other legal or subject matters on a ‘‘standalone’’ basis, regardless of whether such a breach has occurred.

Read more.

 

Sandbagging and Anti-sandbagging Provisions

Learn about "sandbagging" and "anti-sandbagging" provisions from both the buyer’s and seller’s perspectives. 

Read more.

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Disclosure Schedule Updates

Disclosure schedules are a common component of an M&A purchase agreement and are an integral part of the seller's representations and warranties. 

Read more.

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Uses and Types of Knowledge Qualifiers

A knowledge qualifier limits the reach of a contractual provision so that the provision only applies to what the relevant party “knows.” Counsel on both sides of an M&A deal should carefully consider the use of knowledge qualifiers, as their use can operate to shift risk for post-closing problems between buyer and seller. 

Read more

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Indemnification as an Exclusive Remedy

An indemnification as an exclusive remedy provision (also referred to as an ‘‘exclusivity of remedies’’ or ‘‘EOR’’ provision) can provide certainty to a seller but at the same time constitute a waiver of claims otherwise available to a buyer.  The specific exceptions to an EOR provision are very important, and counsel on both sides of an M&A transaction should consider these issues carefully when negotiating an M&A agreement.

Read more

Indemnification as an Exclusive Remedy

 

Waiver of Jury Trials

In private company mergers and acquisitions (‘‘M&A’’) transactions, purchase agreements typically include various provisions that impact the manner in which claims arising in connection with the transaction are to be dealt with, including those relating to waivers of jury trials. This article examines the use of jury trial waiver provisions in private company M&A transactions, and trends in that usage as reported by American Bar Association (ABA) studies.

Read more.

Jury Trial Waivers

 

 

Purchase Price Adjustment Provisions

Definitive purchase agreements (whether asset purchase agreements, stock purchase agreements, or merger agreements) typically contain provisions for post-closing purchase price adjustments. This article looks at the usage of purchase price adjustments in private company M&A transactions.

Read more.

Purchase Price Adjustment Provisions

 

 

No Undisclosed Liabilities Representations

One type of representation and warranty commonly requested by a buyer is a representation that the target company has ‘‘no undisclosed liabilities.’’ This representation is especially important to both seller and buyer because it can significantly impact the relative risk allocation as between the parties for undisclosed—or otherwise unknown—liabilities of the target.  This article examines trends in the usage of ‘‘no undisclosed liabilities’’ (NUL) representations in private company M&A transactions.

Read more.

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American Bar Association Business Law Section
Mergers and Acquisitions Committee

Goulston & Storrs is part of the working committee of the American Bar Association which publishes comprehensive studies on deal point trends in private company M&A transactions.   These studies are generally considered by M&A professionals as the most accurate reflection of the state of the “market” in private company M&A, and are frequently cited in deal negotiations and discussions.

Contact Dan Avery at (617) 574-4131 for more information.

Executive Briefings

Goulston & Storrs is pleased to offer you a series of Executive Briefings on relevant topics in mergers & acquisitions. We'll come to your office and present a program that is customized to your deal team's needs. Contact Dan Avery at (617) 574-4131 for more information.

Newsletters, Advisories, and more

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Contact us

For additional  information regarding M&A trends, deals, statistics, advisories, executive briefings, and more, please contact Dan Avery at (617) 574-4131.

This information should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.

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