The Art of M&A Due Diligence, Second Edition: Navigating Critical Steps and Uncovering Crucial Data

by Lajoux, Alexandra; Elson, Charles

• ISBN13: 9780071629362
• ISBN10: 007162936X
• Edition: 2nd
• Format: Hardcover
• Copyright: 2010-09-15
• Publisher: McGraw Hill

Summary

The most trusted M&A guidebook available--updated for today's extreme-risk world of business.Major financial scandals, geopolitical upheaval, technological advances, rapid globalization . . . The world--and the way business is done--has changed drastically in the 10 short years since the originalpublication of this book. As a result, the alreadytedious M&A process has become exponentially more complex.The most trusted guidebook of its kind,The Artof M&A Due Diligencehelps you uncover problems and inconsistencies in an M&A deal while they're still manageable. You'll find everything you need to mitigate all types of traditional riskfinancial (key ratios, new GAAP-IFRS standards), operational (background checks, on-site visits), transactional (verification, checking warranties), and legal (intellectual property, environmental law).This new edition also addresses complicationsintroduced over the past decade by including: Newinformation about the use of electronic datarooms for due diligence Newfocus on the role of International Accounting Standards Newtools for Foreign Corrupt Practices Act (FCPA) compliance Newregulations concerning the environment and social issues Newcase law of interest, including key decisionsof the Delaware Chancery Court and Delaware Supreme CourtThe fear of risk in an M&A deal is rational, but it shouldn't prevent you from moving ahead. A well-conceived, carefully executed merger or acquisition can be extraordinarily enriching for both buyer and seller. This step-by-step guidebook is all you need to know where to lookand what to look for--when conducting M&A due diligence.

Author Biography

About the Authors
Alexandra Reed Lajoux is Chief Knowledge Officer (CKO) and Corporate Secretary at the National Association of Corporate Directors (NACD), a not-for-profit organization dedicated to educating corporate directors. She has nearly 30 years of experience as a senior writer and editor of newsletters, articles, and books. As CKO, she works with all aspects the Association’s educational programs and publications, providing content expertise to line managers in all areas.

Reed Lajoux served for a decade as the editor of Mergers & Acquisitions Magazine, the premier publication for working professionals in the M&A field. The official publication of the Association for Corporate Growth (ACG), each monthly issue of Mergers & Acquisitions reports on the critical corporate and private equity trends that buyers, sellers and their advisers need to execute profitable, value-creating deals in a highly charged marketplace.

A graduate of Bennington College, she holds advanced degrees in comparative literature from Princeton University (M.A. 1973, Ph.D. 1978), and a master's degree in business (XMBA 1981) from Loyola College in Maryland. She holds a Certificate of Director Education from NACD, and conducts educational workshops for all staff on a variety of business subjects.

Charles M. Elson is the Chair in Corporate Governance and the Director of the Center for Corporate Governance at the University of Delaware. He is also "Of Counsel" to the law firm of Holland & Knight. He formerly served as a Professor of Law at Stetson University College of Law. He is a graduate of Harvard College and the University of Virginia Law School. He has been a Visiting Professor at the University of Illinois College of Law, the Cornell Law School, and the University of Maryland School of Law, and is a Salvatori Fellow at the Heritage Foundation in Washington, D.C., and a member of the American Law Institute.

Elson has written extensively on the subject of boards of directors. He served on various committees of the National Association of Corporate Directors and presently serves on that organization's Advisory Council. He is Vice Chairman of the ABA Business Law Section’s Committee on Corporate Governance and a member of its Committee on Corporate Laws. Additionally, Elson served as an adviser and consultant to Towers Perrin, as director of Circon Corporation, Sunbeam Corporation, Nuevo Energy Company, the Investor Responsibility Research Center, Alderwoods Group, and is presently a member of the Board of Directors of AutoZone, Inc., and HealthSouth Corporation.

Table of Contents

Preface and Acknowledgments	p. v
Introduction: The Changing Landscape for Due Diligence in 2010	p. xi
The Due Diligence Process	p. 1
Conducting Due Diligence: An Overview	p. 3
The Financial Statements Review	p. 35
The Operations and Management Review	p. 59
The Legal Compliance Review	p. 95
Transactional Due Diligence	p. 123
The Documentation and Transaction Review	p. 125
Detecting Legal Exposure under Securities Law	p. 161
Detecting Exposure under Tax Law and Accounting Regulations	p. 191
A Closer Look at Compliance	p. 229
Detecting Exposure under Antitrust Law and International Economic Law	p. 231
Detecting Exposure under Intellectual Property Law	p. 289
Detecting Exposure under Consumer Protection Laws	p. 313
Detecting Exposure under Environmental Laws	p. 325
Detecting Exposure under Employment Law	p. 351
Conclusion	p. 385
Due Diligence Checklist	p. 387
Landmark and Recent Due Diligence Cases	p. 401
The Federal Circuit Courts	p. 461
Notes	p. 463
Index	p. 523
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