CORPORATE DEAL SOURCE
CORPORATE DEAL SOURCE
Critical Transactional Insights for Deal-Makers
CORPORATE DEAL SOURCE
Critical Transactional Insights for Deal-Makers
Mergers & Acquisitions
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Inside M&A – Winter 2015

McDermott Will & Emery has released the Winter 2015 issue of Inside M&A, which focuses on current issues surrounding mergers and acquisitions.  Articles in this issue include: Recent U.S. Cases Highlight Liability Risks to Executives in Mining, Heavy Industrial Transactions Historically, corporate executives rarely faced personal or criminal liability resulting from mining or environmental accidents in the United States. Several criminal cases stemming from two recent disasters, however, indicate that the tide may be turning. These disasters, the repercussions of which have been playing out recently in the U.S. criminal courts, should put private equity and strategic investors in the mining and heavy industrials space on alert. Thorough due diligence into a target’s past operations and compliance record is more important than ever before. Read the full article. Options for Buying a UK Company with Multiple Selling Shareholders In the United Kingdom,...

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Focus on Private Equity – October 2014

McDermott Will & Emery has released the October 2014 issue of Focus on Private Equity, which provides insight on issues surrounding private equity transactions and the investment life cycle across industries. Articles in this issue include: Proposed EU Merger Review of Non-Controlling Minority Shareholding Acquisitions: Challenges and Opportunities for Private Equity A recently proposed plan to reform EU Merger Regulation could expand the scope of transactions subject to prior notification. For the first time, minority shareholding acquisitions that do not lead to a change in control could be subject to prior notification to the European Commission. The proposed expansion of the Merger Regulation’s jurisdiction could significantly impact businesses. Read the full article. IPO Market Offers Attractive Exit Alternative for Sponsor-backed Companies The strong IPO market offers private equity sponsors an attractive alternative to the sale of a portfolio...

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Inside M&A – Fall 2014

McDermott Will & Emery has released the Fall 2014 issue of Inside M&A, which focuses on current issues surrounding mergers and acquisitions.  Articles in this issue include: Managing Compliance Risks in M&A Transactions Compliance risk management plays an increasingly important role in mergers and acquisitions transactions.  Appropriate compliance due diligence helps to establish the true value of the target company because successor liability for non-compliance of the target company can jeopardize the whole transaction.  Post-closing compliance initiatives help to reduce the compliance risks significantly. Read the full article.  You’ve Acquired a New Qualified Retirement Plan?  Time for a Compliance Check In connection with a merger or acquisition, an acquiring company may end up assuming sponsorship of a tax-qualified retirement plan that covers employees of the acquired company.  This article provides a brief summary of some key issues that a...

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Search Funds: Catering to Canadian Investors

As those in the search fund community are aware, finding the right investors for a fund is critical to its success.  Equity sources bring more than their capital to the table; the best investors serve as experienced advisers and trusted mentors to search funders as they navigate the acquisition phase and beyond.  As the search fund model has proliferated both within and beyond the United States, today’s search funders may have more potential stops on their “roadshows” than their predecessors. In seeking their ideal mix of initial investors, several of our recent search fund clients have ventured north of the border to raise a portion of their equity.  For search funds, which are typically structured as U.S. limited liability companies (LLC) with heavily standardized investment documents, taking on Canadian investors in a U.S. search fund has raised some interesting legal and practical issues.  Below are a few gating items for the search funder to consider in...

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How Practitioners Can Apply Legal Project Management to M&A: New Tools for New Times

Learn how corporate counsel should (and are) adopting new tools and technologies resulting in significant efficiencies in legal project management. Byron Kalogerou, a Corporate partner in McDermott’s Boston office and co-chair of the Legal Project Management Task Force of the M&A Committee of the Business Law Section of the American Bar Association, explains why the "old way" no longer works and how legal project management is being utilized for M&A transactions.  Read the full article.

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Focus on Private Equity – July 2014

McDermott Will & Emery has released the July 2014 issue of Focus on Private Equity, which provides insight on issues surrounding private equity transactions and the investment life cycle across industries.  Articles in this issue include: Latin American Private Equity on the Rise Favorable macroeconomic trends and positive regulatory developments continue to make Latin America an attractive destination for private equity investors looking for acceptable returns in relatively stable emerging markets. Not surprisingly, some challenges remain for foreign private equity investors entering the region, but most of these risks should be manageable for investment teams and advisors with sufficient experience in those jurisdictions. Read the full article. Tax Considerations When Acquiring Non-U.S. Portfolio Companies—Mitigating Subpart F Inclusions Subpart F income can diminish returns for investors acquiring non-U.S. portfolio companies by increasing tax cost....

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Cross-Border Conversion of a Company in the European Union

Traditionally, a cross-border “migration” of a company from one European Union (EU) Member State to another EU Member State, while technically possible, has been cumbersome and costly.  Such a migration would involve either a wholesale move of the subject company’s business seat (i.e., the location of its chief executive office) or a cross-border merger of national companies could be considered.  But that has now changed.  Recently, however, the VALE judgment of the European Court of Justice issued on July 12, 2012 has opened the door for EU companies to take advantage of a cross-border “conversion” (i.e. , the transfer of the registered office from one jurisdiction to another, including a change of applicable law, without the requirement of winding up, liquidating the company ).  Even though the VALE judgment was handed down in 2012, the precise procedural rules, in particular how local commercial registers would apply the rulings of the VALE judgment,...

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Deconstructing a Letter of Intent for Business Owners, Part 1

I recently appeared on an episode of the Private Equity FunCast: “The Art (and Science?) of the LOI” to talk deal terms with private equity masters Devin Mathews and Jim Milbery.  This well-spent hour got me thinking about how confusing some of the deal terms in a Letter of Intent (LOI) must be for first time sellers.  As a result, we are launching a series of blog posts that will deconstruct the LOI into easily understandable parts. In this series, we will be covering the following topics: The purchase price and how it is calculated; The structure of the transaction; Key tax issues; Key deal terms, including working capital, representations and warranties, and indemnification/escrow arrangements; and The legal “mumbo-jumbo.” We covered much of this during the FunCast, but will take a deeper dive here with a more intense focus. The Purchase Price and how it is Calculated For most business sellers the purchase price is the purpose of the deal – cashing in on...

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Delaware Law to Provide for Ratification of Defective Corporate Acts as of April 1, 2014

It is quite common during the course of legal due diligence to discover that a target company has issued more stock than it had legally authorized through its certificate of incorporation.  Many companies, particularly emerging growth companies, are often too preoccupied with ambitious growth plans and raising critical private capital and overlook basic corporate housekeeping.  Or they dole out lots of equity to employees and business partners in order to conserve much needed cash, but forget that there is actually a legal limit to the number of shares they can grant.  These and other legal flaws, or “defective corporate acts,” can exist undetected for years in privately held companies, but they come to light at the worst possible time – when the company is being sold or when a significant capital raise is being undertaken.  Previously, the lawyers would advise that these past errors placed a troublesome legal cloud over the company that presented risks that...

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Inside M&A – Winter Issue

McDermott recently released the Winter 2014 issue of Inside M&A, which focuses on current issues surrounding mergers and acquisitions.  Articles in this issue include: Delaware Court of Chancery Upholds Forum Selection Bylaws During the last several years, shareholders have challenged nearly every merger and acquisition (M&A) transaction that targeted a U.S. public company where the value of the transaction was greater than $100 million and the offer price was at least $5 per share.  As a result of this litigation explosion, many corporations have adopted forum selection bylaws that require such challenges to be brought in the target company’s state of incorporation.  Chancellor Leo E. Strine Jr.’s decision in Boilermakers Local 154 Retirement Fund v. Chevron Corp. to uphold such bylaws is an important step toward reducing the burden and expense of litigation over M&A deals. Read the full article. Crying Revlon: Delaware Courts Dismiss Claims in...

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