Mergers and Acquisitons : A Step-by-Step Legal and Practical Guide

by Miller, Edwin L.

• ISBN13: 9780470222744
• ISBN10: 0470222743
• Format: Hardcover
• Copyright: 2008-01-09
• Publisher: Wiley

Summary

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, Vice President, Business 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 business people, 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

Author Biography

Edwin L. Miller Jr. is a partner with the law firm of Sullivan & Worcester LLP. He has practiced corporate and securities law for over thirty-five years and has extensive mergers and acquisitions experience in both the public and private markets. Miller also represents emerging and established technology companies in their financing, technology transfer, and acquisition activities. He has been named to The Best Lawyers in America publication and is the author of Lifecycle of a Technology Company: Step-by-Step Legal Background and Practical Guide from Startup to Sale (Wiley).

Table of Contents

Preface	p. xi
Acknowledgments	p. xv
About the Web Site	p. xvii
Structuring Fundamentals	p. 1
Basic Corporate Finance Concepts	p. 1
Reasons for Acquisitions	p. 8
Three Basic Acquisition Structures	p. 13
Structuring Considerations: Overview	p. 16
The Acquisition Process	p. 23
Overview	p. 23
Valuation of the Business	p. 31
Investment Bank Engagement Letters	p. 35
Confidentiality Agreements	p. 40
Letters of Intent	p. 43
Stay Bonuses and Other Employee Retention Arrangements	p. 46
Business And Legal Due Diligence	p. 49
Intellectual Property Due Diligence	p. 64
From Signing to Closing	p. 77
Appendixes	p. 77
Corporate (Non-Tax) Structuring Consdierations	p. 79
Business Objectives and Other Nontax Structuring Considerations	p. 79
Acquisition Structure Diagrams	p. 89
Forms of Acquisition Consideration	p. 90
Debt	p. 95
Cash, Stock, and Earnouts	p. 110
Successor Liability and the De Facto Merger Doctrine	p. 116
Securities Law Compliance	p. 118
Antitrust Compliance: Hart-Scott-Rodino Act	p. 131
Equity Compensation	p. 138
Incentive Stock Options	p. 144
Employment Agreements and Noncompetition Covenants	p. 149
Employment and Benefits Law	p. 157
Acquisition Accounting	p. 160
Recapitalization Accounting	p. 165
Cross-Border Acquisitions	p. 166
Appendixes	p. 169
Tax Considerations	p. 171
Taxable Versus Tax-Free Transactions: Overview of Relevant Situations	p. 171
Detailed Analysis of the Positions of the Target and Its Owners and of the Buyer	p. 173
Taxable Transactions and Their Tax Effects	p. 175
Tax-Free Transactions	p. 180
Special Situations	p. 186
Golden Parachute Tax	p. 191
The Definitive Acquisition Agreement	p. 197
Economic Terms	p. 197
Representations and Warranties	p. 214
Covenants	p. 226
Additional Agreements	p. 230
Conditions to Closing	p. 231
Survival of Representations and Indemnification	p. 233
Termination	p. 238
Miscellaneous	p. 239
Representing Targets: A Summary	p. 239
Appendixes	p. 242
Acquisitions of Public Companies	p. 243
Public-to-Public Mergers: What Is Different?	p. 243
Case Law-Developed Fiduciary Duites and Standards of Review	p. 247
Securities Laws and Public Company Acquisitions	p. 272
Anti-Takeover Devices	p. 283
Appendix	p. 293
Leveraged Buyouts (Structural and Tax Issues) and Acquisitions of a Troubled Business (Creditors' Rights and Bankruptcy)	p. 295
Leveraged Buyouts: Structural and Tax Issues	p. 295
Acquisition of a Troubled Business Generally	p. 302
Fraudulent Transfers	p. 305
Acquisitions out of Bankruptcy	p. 313
Index	p. 323
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