Mergers and Acquisitions: A Step–by–Step Legal and Practical Guide + Website

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

Preface

Acknowledgments

Chapter 1 Structuring Fundamentals

Basic Corporate Finance Concepts

Reasons for Acquisitions

Three Basic Acquisition Structures

Structuring Considerations: Overview

Chapter 2 The Acquisition Process

Overview

Valuation of the Business

Investment Bank Engagement Letters

Confidentiality Agreements

Letters Of Intent

Stay Bonuses and Other Employee Retention Arrangements

Business and Legal Due Diligence

Intellectual Property Due Diligence

From Signing To Closing

Appendixes

Chapter 3 Corporate (Nontax) Structuring Considerations

Business Objectives and Other Nontax Structuring Considerations

Acquisition Structure Diagrams

Forms of Acquisition Consideration

Debt

Cash, Stock, and Earnouts

Successor Liability and the De Facto Merger Doctrine

Securities Law Compliance

Antitrust Compliance: Hart–Scott–Rodino Act

Equity Compensation

Incentive Stock Options

Employment Agreements and Noncompetition Covenants

Indemnification

Employment and Benefits Law

Acquisition Accounting

Recapitalization Accounting

Cross–Border Acquisitions

Appendixes

Chapter 4 Tax Considerations

Taxable Versus Tax–Free Transactions: Overview of Relevant Situations

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

Taxable Transactions and Their Tax Effects Taxable Transactions Treated As Stock Purchases

Tax–Free Transactions

Special Situations

Golden Parachute Tax

Chapter 5 The Definitive Acquisition Agreement

Economic Terms

Representations and Warranties

Article IV: Representations and Warranties of the Shareholders

Article V: Representations and Warranties of Parent [Buyer] and Merger Sub

Covenants

Additional Agreements

Conditions to Closing

Survival of Representations and Indemnification

Termination

Miscellaneous

Representing Targets: A Summary

Appendixes

Chapter 6 Acquisitions of Public Companies

Public–To–Public Mergers: What Is Different?

Case Law Developed Fiduciary Duties and Standards of Review

Evolution of Fiduciary Duty Case Law and Judicial Review

Securities Laws and Public Company Acquisitions

Anti–Takeover Devices

Appendix

Chapter 7 Leveraged Buyouts (Structural and Tax Issues) and Acquisitions Of A Troubled Business (Creditors Rights And Bankruptcy)

Leveraged Buyouts: Structural and Tax Issues

Acquisition of A Troubled Business Generally

Fraudulent Transfers

Acquisitions Out Of Bankruptcy

Chapter 8 International M&A

Cross–Border Acquisitions

Chapter 9 Joint Ventures

Reasons for Joint Ventures

Types of Joint Ventures

Typical Joint Venture Terms

Appendix

About the Web Site

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.