What's Market?

Overview

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.

Bloomberg Law M&A Trends Series

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 understood.

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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.

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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.

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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.

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Trends in M&A Provisions: Purchase Price Adjustment Provisions

In mergers and acquisitions (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains provisions for post-closing purchase price adjustments.

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Trends in M&A Provisions: Sandbagging and Anti-Sandbagging Provisions

A “sandbagging” provision (sometimes referred to as a “pro-sandbagging” provision) in an M&A agreement (asset purchase agreement, stock purchase agreement, or merger agreement) states that a buyer’s remedies against the seller under the agreement are not impacted regardless of whether the buyer had knowledge, at or prior to closing, of the facts or circumstances giving rise to the claim.

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Trends in M&A Provisions: Financial Statement Representations

U.S.-based merger and acquisition (“M&A”) agreements (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contain a seller representation relating to the target company’s financial statements. This article examines trends in financial statement representations in private company M&A transactions, as reflected in the ABA studies.

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Trends in M&A Provisions: Disclosure Schedule Updating

Disclosure schedules are a common component of an M&A purchase agreement (whether a stock purchase agreement, asset purchase agreement, or merger agreement). The disclosure schedules provide fact-specific disclosures (or exceptions to specific statements) relating to the representations and warranties.

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Trends in M&A Provisions: Indemnification as an Exclusive Remedy

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations and warranties made by the seller with respect to the target company.

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Trends in M&A Provisions: No Undisclosed Liabilities Representations

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement contains representations and warranties made by the seller with respect to the target company.[2] 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, operations and financial condition, but also the relative negotiating strength of the buyer and seller.

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Trends in M&A Provisions: Waiver of Jury Trials

The Seventh Amendment of the U.S. Constitution guarantees the right to a jury trial for civil litigants in federal court. Most waivers of constitutional rights at the federal level must be knowing, voluntary, and intelligent.

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Trends in M&A Provisions: Damage Mitigation Provisions

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations, warranties, and covenants, along with related indemnification obligations.

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Trends in M&A Provisions: Compliance with Laws Representations

While sellers generally do not object to giving a representation that addresses legal compliance, they usually seek to include certain limitations that narrow the representation’s scope.

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Trends in M&A Transactions: Use of Knowledge Qualifiers for Representations and Warranties

In merger and acquisition ("M&A") transactions, the definitive purchase agreement typically contains representations and warranties made by the seller with respect to the target company.

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Trends in M&A Provisions: Express Non-Reliance Provisions

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations, warranties, and covenants, along with related indemnification obligations

Read more.

Trends in M&A Provisions: Insurance Reduction Provisions

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations, warranties, and covenants, along with related indemnification obligations.

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Trends in M&A Provisions: Exclusion of Consequential Damages

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations and warranties and related indemnification covenants.

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Trends in M&A Provisions: Alternative Dispute Resolutions Provisions

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations, warranties, and covenants, along with related indemnification obligations.

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Trends M&A Provisions: Earnout Provisions

In merger and acquisition (“M&A”) purchase agreements (whether asset purchase agreement, stock purchase agreement, or merger agreement), provisions addressing the purchase price, and how it is to be paid, are, understandably, amongst the most critical to get right.

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Trends in M&A Transactions: Separate Escrows for Purchase Price Adjustments

In mergers and acquisitions (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains provisions for post-closing purchase price adjustments.

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Trends in M&A Provisions: After-Tax Indemnity Limitations

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations, warranties, and covenants, along with related indemnification obligations.

Read more.

Trends in M&A Provisions: Indemnity Caps

In merger and acquisition (“M&A”) transactions, the definitive purchase agreement (whether asset purchase agreement, stock purchase agreement, or merger agreement) typically contains representations and warranties made by the seller 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 tend to reflect the relative negotiating strength of the buyer and seller.

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.

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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.

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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