Tag: Trends

Dealology – Equity Commitment Letters and Guarantees in Private Equity Deals

Equity commitment letters are essentially ubiquitous in private equity deals and guarantees are common when debt financing and reverse termination fees are in the mix. In this Dealology video, we discuss what equity commitment letters and guarantees are, why and when they are used and a few key business points, […]

Dealology – Purchase Price & Post-Closing Liability Tax Factors

The purchase price in a private deal is never the headline number you first read about. It gets adjusted for a variety of factors, including tax considerations. Negotiating post-closing liability and indemnities also must take tax into account. In this video, Eric Schwartzman and Alexander Lee discuss purchase price and […]

Taking a Play out of the Financial Acquirer’s Playbook

As the NFL season gets underway, it is interesting to see how certain plays go from fringe status to near-universal. A recent example is the “run-pass option” that, before finding a home in every NFL team’s playbook, was used only in high school and college football games. [1] Coaches survey plays […]

Dealology – Three Key Issues in Private Equity Add-On Deals

Private equity add-on acquisitions – the deals where a PE firm has already purchased a portfolio company in an industry or market segment and uses that investment as a platform to acquire other companies – have increased every year since 2013 and in 2018 accounted for two-thirds of all private […]

Use of Earn-Outs to “Bridge” the Valuation Gap

There’s an old saying, probably at some point attributed to Abraham Lincoln or Einstein, that a bridge shows no allegiance to either side. It’s a wonderful metaphor and one that dealmakers would be wise to remember when working to construct agreements to solve for divergent views on value. What two […]

Inadequate Cybersecurity and Data Privacy Due Diligence Alleged in Starwood Deal as UK ICO Fines Marriott $125M for GDPR Violations

On July 9, 2019, the UK Information Commissioner’s Office (ICO) publicly announced its intent to impose a £99M (approximately $123M) GDPR fine on Marriott as a result of its acquisition of Starwood and the subsequent discovery and notification of a data breach at Starwood. While some may view this as […]

Dual-Track Processes: How to Turbocharge Your Exit

Exiting an investment is an inherently uncertain process. Even for a thriving business with a viable equity story, committed stakeholders and the right advisers, the final deal terms and valuation are typically guided by factors beyond a company’s control. These include prevailing market sentiment, current appetite for acquisitions in a […]

Top 10 Cross-Border M&A Trends across the Pond

In spite of a general environment of political and economic uncertainty and a daily sprinkling of stock market volatility, trade wars, sanctions, the U.S. government shutdown disrupting the market for IPOs, Brexit uncertainty, natural disasters and various other crises, cross-border M&A activity momentum continues. New records were attained in the […]

Breaking multiple records across the board

Cooley M&A partner Michal Berkner comments in Acquisition Daily on the active year in M&A dealflow. “Conditions continue to be ripe for high levels of cross border M&A activity in the months ahead – cash rich corporates, Private Equity and funds with unprecedented levels of dry power and ticking investment […]

The Cooley Outlook for 2018 M&A

What’s on tap for 2018 M&A? A recap of 2017 trends and the Cooley outlook on this year’s dealmaking: Buying Innovation: Retention and Non-Competes. For both old-line companies and tech giants, innovation is the name of the game. It is often difficult for large companies to foster innovation organically for […]

TechCrunch Equity Podcast: 2017’s Top Tech Acquisitions and What’s in Store for 2018

The January 12, 2018, edition of TechCrunch’s weekly venture capital-focused podcast, Equity, looks back at the past year’s M&A transactions and evaluates what’s in store for 2018. Cooley partner and co-chair of the firm’s M&A practice, Jamie Leigh, discusses 2017’s market uncertainty while predicting a more competitive and bold M&A […]

The Art of Drafting Milestones for an Earn-Out

Former stockholders of SARcode Bioscience were recently denied a claim that they were entitled to be paid $425 million in milestone payments under a merger agreement. The decision provides an anecdotal lesson in drafting milestones and suggests that the more technically prescribed milestones may be more difficult to meet, even […]

Non-Competes for California Employees in M&A Deals: Don’t Fudge It

Post-employment non-compete covenants are generally invalid in California, with certain limited but important exceptions like when a business or associated goodwill is sold and the buyer – as part of the deal – wants to prohibit certain sellers from competing with their former business. Consequently, buyers of California-based businesses generally […]

Martha Stewart Decision Draws Roadmap for Controller Sales to Third Parties

A transaction involving a controlling stockholder on both sides of the deal presents a clear conflict of interest that will result in heightened scrutiny under the “entire fairness” standard of review if later challenged. However, there is not always a conflict when the controller stands on just one side of […]

Chicago Bridge Reversal Reiterates Need for Consistent Accounting in Working Capital True-Up

The vast majority of private company acquisitions contain some type of purchase price adjustment to account for any changes in certain financial metrics (including working capital) of the target between a specified reference date (or target) and the closing date. For a variety of reasons (including the inability to predict […]

Monetizing an Earn-Out – Does That Make It a “Security?”

In life sciences/medical technology transactions, buyers and sellers often use milestone-based and sometimes royalty-based contingent consideration to compensate sellers for assets that are in various stages of development from clinical- to development-stage to product commercialization.[1]  In licensing transactions, there is an established secondary market through which licensors may monetize their […]

New Pubcos Should Consider Defensive Health in Light of ISS/GL Recommendations

ISS and Glass Lewis are continuing to apply special scrutiny to certain corporate governance provisions of “newly public” companies (generally, companies that have gone public in 2014 or later). See our December 2016 client alert. In short, the latest policies (which have evolved over the last few years) provide that […]

When Approval for a Drug “Indication” Gets Murky: Drafting Milestones to Avoid Disputes

According to a recent study by SRS of recent private life sciences deals, disputes over earn-outs arose in about one-third (36%) of all milestones that were expected to be hit by September 2016.[1] While most disputes were not about contract interpretation issues regarding whether an event triggered the milestone or […]

$2 Billion Purchase Price Dispute Over GAAP Compliance Highlights Need for Careful Drafting

Purchase price adjustments are common features (2015 SRS study: 77% of deals) of private merger agreements that are generally intended to ensure that the acquired company will have the same level of cash or working capital to operate the business post closing that it had at signing. However, if not […]

2017 M&A Trends Series: Negotiating Anti-Reliance Language

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Negotiating Anti-Reliance Language Buyers continued to assert fraud claims in private […]

2017 M&A Trends Series: Appraisal Risks Factor High

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Appraisal Risks Factor High In deals where stockholders have the right […]

2017 M&A Trends Series: Delaware Confronts M&A Litigation

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Delaware Confronts M&A Litigation M&A deal litigation continues to plague most […]

SEC Announces Enforcement Action for Failure to Disclose Banker Fee Arrangements

On February 14, 2016, the SEC settled an enforcement action against CVR Energy for providing misleading disclosure about the fees payable to CVR’s two financial advisors in connection with CVR’s defense of a hostile tender offer by affiliates of Carl Icahn in 2012. The SEC did not impose any civil […]

2017 M&A Trends Series: Rep & Warranty (R&W) Insurance is Here

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Rep & Warranty (R&W) Insurance is Here Previously, transaction insurance (or […]

2017 M&A Trends Series: Uncertain Times Cast Focus on Deal Certainty

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Uncertain Times Cast Focus on Deal Certainty Public-target M&A deals and […]

2017 M&A Trends Series: Innovation Pressures Fuel M&A

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Innovation Pressures Fuel M&A The WSJ has written about the rise […]

2017 M&A Trends Series: The Trump Effect

So far this year, deal parties are approaching M&A with cautious optimism. This series of Cooley M&A blog posts include some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. The Trump Effect How President Donald Trump will shape the regulatory […]

2017 M&A Trends Series: Cautious Optimism in the New Year

So far this year, deal parties are approaching M&A with cautious optimism. Over the next few days, we will run a series of Cooley M&A blog posts with some brief observations that offer some M&A highlights over the past year and our thoughts for the year to come. Cautious Optimism […]

Allergan Fined for Failure to Disclose Merger Negotiations with Third Parties During Hostile Bid

At what point do “discussions” with a friendly merger party become “negotiations” that are required to be publicly disclosed under the tender offer rules in response to a hostile bid? In a recent settlement of cease and desist proceedings against Allergan in connection with Valeant and Pershing Square’s well-publicized hostile […]

Why we Expect Private Equity to Invest More in Tech in 2017

With all the analysis on domestic and international political events and their potential impact on M&A trends, it’s easy to miss that 2016 represented the continuation of a meaningful paradigm shift in private equity. With increasing frequency, traditional private equity investors are focusing on tech. Even in the relatively slow […]

ISS and Glass Lewis Update 2017 Proxy Voting Policies

Institutional Shareholder Services (ISS) and Glass Lewis (GL), the two most influential proxy advisory firms to stockholders of public companies, recently released updates to their voting policies in 2017, including updates to their policies on “newly public” companies that have adopted anti-takeover protection measures considered “adverse to shareholder rights.” Our […]

Corp. Fin. Posts New Guidance on Banker Fee Disclosure of Alternative Fees for Tender Offers

On November 18, 2016, the Staff of the Division of Corporation Finance issued two new C&DIs that address banker fee disclosures for tender offers on Schedule 14D-9. The new C&DIs clarify that disclosure is required of “all” material terms for compensation including the types of fees payable to the financial […]

Cybersecurity Diligence in M&A Transactions

Recently, in the midst of an M&A transaction involving Verizon and Yahoo!, news broke of a Yahoo! cybersecurity breach that had occurred approximately two years earlier. This event raised a lot of speculation around what effect the breach may have on the deal, including by how much it might change […]

Private Market Trends Snapshot 2016

M&A deal terms will almost always vary based on the specific context of the transaction, including the deal price, structure and each party’s negotiating leverage. Although no amount of data can replace context-specific analysis, data-driven decision-making continues to make its way into negotiations and can, under the right circumstances, provide […]

Options to Acquire: How these Creative Acquisition Strategies Differ from a Traditional Purchase

Creative acquisition strategies are offering both buyers and targets additional opportunities to grow their businesses through M&A. One strategy that we are seeing parties use is the “option to acquire” structure, which addresses both the needs of a target company to develop a product or business on the one hand […]

Top 10 M&A Developments and Trends for 2016

Here is a look back at the top M&A developments that affected deal-making last year and a look forward to our expectations for 2016.

Cooley 1H 2014 Deal Activity

Cooley closes 97 deals with an aggregate value of $36.9 billion Cooley continues to be a leading law firm for clients seeking to transform their businesses through strategic transactions. In the first half of 2014, we advised on 91 signed M&A deals with an aggregate value of $30.7 billion. Year to date, […]

Recent Trends in Antitrust and Regulatory Risk – Shifting in M&A Agreements

The recent drumbeat of aggressive antitrust and regulatory merger enforcement has put a spotlight on the importance of understanding the antitrust and regulatory risks raised by a potential deal, and efficiently allocating that risk in the transaction agreement. While transactions in dynamic technology, healthcare/life sciences, new media and telecom industries […]

Appraisal Arbitrage – A Rising Star in the Activist Playbook

Shareholder activism gains momentum and publicity with each passing proxy season. Activist-focused funds increase capital and investor expectations, proxy contest tactics become more practiced and skillful, nominees for board positions are industry tailored and more sophisticated and social media increases the reach (and entertainment value) of activist communications. What comes […]

Ten Most Influential M&A Developments of this Millennium

As we turn the page on a new year, many of us reflect upon the noteworthy events of the past as we look forward to the future. Deal lawyers are not exempt from this phenomenon. We present herewith our choices for the 10 Most Influential M&A Developments of this Millennium […]

Developments Under Delaware Law in the Enforceability of Non-Reliance Provisions Against Fraud Claims

A series of cases in 2013 refined the law in Delaware relating to the enforceability of non-reliance clauses. Non-Reliance clauses are generally intended to limit a buyer’s ability to make fraud claims based upon representations made outside of the acquisition agreement (e.g., in diligence materials in the data room, spoken […]