Mergers and Acquisitions. A Step-by-Step Legal and Practical Guide + Website. 2nd Edition. Wiley Finance

  • ID: 3862921
  • Book
  • 336 Pages
  • John Wiley and Sons Ltd
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Praise for Mergers and Acquisitions

"Buyers and sellers both hope to be winners in an acquisition. But at the negotiating table, there is only one winner for each point and winning may mean a significant change in the deal economics. The insights in this book are crucial for both buyers and sellers and lay out the rationale for both sides of all of the money issues and other important deal points."
Todd Koopersmith, Senior Vice President, Corporate Development, Iron Mountain

"This book will help M&A professionals get up to speed on a wide range of deal points. It explains the legal background and transaction structuring issues in M&A transactions that every investment professional must know."
Gregory Burkus, Founder and Partner, Shasta Partners

"This book is an essential resource for businesspeople, and the lawyers and other professionals who advise them, to develop a real–world understanding of how the M&A process works. More importantly, it explains why specific deal structures, contractual terms, and diligence procedures are used."
Jonathan Wolfman, Partner, WilmerHale, Boston

"As U.S. M&A concepts, documents, and practices become increasingly adopted internationally, this book will be an invaluable resource. It provides an excellent overview of the entire area, and is easily understandable by corporate executives and lawyers outside the United States."
Leo Specht, Founder, Specht Rechtsanwalts–Gesellschaft mbH, Vienna, Austria

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Preface xi

Acknowledgments xv

CHAPTER 1 Structuring Fundamentals 1

Basic Corporate Finance Concepts 1

Reasons for Acquisitions 7

Three Basic Acquisition Structures 11

Structuring Considerations: Overview 14

CHAPTER 2 The Acquisition Process 20

Overview 20

Valuation of the Business 27

Investment Bank Engagement Letters 30

Confidentiality Agreements 35

Letters of Intent 37

Stay Bonuses and Other Employee Retention Arrangements 39

Business and Legal Due Diligence 42

Intellectual Property Due Diligence 55

From Signing to Closing 66

Appendixes 67

CHAPTER 3 Corporate (Nontax) Structuring Considerations 69

Business Objectives and Other Nontax Structuring Considerations 69

Acquisition Structure Diagrams 78

Forms of Acquisition Consideration 78

Debt 83

Cash, Stock, and Earnouts 96

Successor Liability and the De Facto Merger Doctrine 101

Securities Law Compliance 104

Antitrust Compliance: Hart–Scott–Rodino Act 114

Equity Compensation 120

Incentive Stock Options 126

Employment Agreements and Noncompetition Covenants 130

Indemnification 136

Employment and Benefits Law 138

Acquisition Accounting 140

Recapitalization Accounting 144

Appendixes 145

CHAPTER 4 Tax Considerations 146

Taxable Versus Tax–Free Transactions: Overview of Relevant Situations 146

Detailed Analysis of the Positions of the Target and Its Owners and of the Buyer 148

Taxable Transactions and Their Tax Effects 150

Tax–Free Transactions 154

Special Situations 159

Golden Parachute Tax 164

CHAPTER 5 The Definitive Acquisition Agreement 169

Economic Terms 169

Representations and Warranties 184

Covenants 196

Additional Agreements 199

Conditions to Closing 200

Survival of Representations and Indemnification 201

Termination 206

Miscellaneous 206

Representing Targets: A Summary 207

Appendixes 210

CHAPTER 6 Acquisitions of Public Companies 211

Public–to–Public Mergers: What is Different? 211

Case Law Developed Fiduciary Duties and Standards of Review 214

Evolution of Fiduciary Duty Case Law and Judicial Review 220

Securities Laws and Public Company Acquisitions 237

Anti–Takeover Devices 247

Appendix 256

CHAPTER 7 Leveraged Buyouts (Structural and Tax Issues) and Acquisitions of a Troubled Business (Creditors Rights and Bankruptcy) 257

Leveraged Buyouts: Structural and Tax Issues 257

Acquisition of a Troubled Business Generally 263

Fraudulent Transfers 265

Acquisitions Out of Bankruptcy 272

CHAPTER 8 International M&A 282

Cross–Border Acquisitions 282

CHAPTER 9 Joint Ventures 292

Reasons for Joint Ventures 292

Types of Joint Ventures 293

Typical Joint Venture Terms 295

Appendix 304

About the Website 305

Index 307

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EDWIN L. MILLER, JR. is a partner with Sullivan & Worcester. He has practiced corporate and securities law for over forty years. He has represented both issuers and underwriters in numerous IPOs, secondary stock offerings, and other public market transactions. In addition, he has organized a number of private equity/venture capital funds and has represented venture capital firms and technology companies in venture financings.

LEWIS N. SEGALL is a corporate partner and leader of the Corporate/M&A Group at Sullivan & Worcester. He regularly represents public and private companies in equity and debt financings, joint ventures, domestic and international mergers and acquisitions, and general corporate matters. He also represents financial institutions in secured and unsecured credit facilities.

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