1. Nuts and Bolts of an M&A Transaction
Corporate Law
ReedSmith
Nuts and Bolts of an M&A Transaction
Presented by Ken Siegel and Nikki Bechtold
August 23, 2018

2. Agenda Life Cycle of a Deal Structure of Acquisitions
Commonly Negotiated Provisions in a Purchase Agreement
Current M&A Market
Recent Developments
Q&A

3. Life Cycle of a Deal (One Step)
Due Diligence
Draft & Negotiate Deal Documents
Sign the Deal
Sign and Close the Deal
Work to Satisfy Closing Conditions
Post-Closing Obligations
Claims, etc.
Celebrate!

4. Life Cycle of a Deal (Two Step)
Due Diligence
Draft & Negotiate Deal Documents
Sign the Deal
Close the Deal
Work to Satisfy Closing Conditions
Post-Closing Obligations
Claims, etc.
Celebrate!

5. Structure of Acquisitions
Types of Acquisitions:
Asset Purchase Acquisition
Stock Purchase Acquisition
Combination of Stock and Asset Purchase Acquisition
Merger

6. Commonly Negotiated Provisions in a Purchase Agreement
Economic Provisions
Representations & Warranties
Indemnification
Covenants
Two Step Specific Provisions

7. Assumptions Private Strategic Acquisition Debt Free and Cash Fee
No Representation and Warranties Insurance
No Rollover by Sellers
No Tax Related Issues
No Financing

8. Economic Provisions Purchase Price
Defined Terms: Assets and Liabilities
Working Capital & Working Capital Adjustment
Escrow
Earn-Out

9. Representations & Warranties
Buyer: “We are who we say we are”
Seller: “You are getting what you think you are paying for”
Controversial Reps & Warranties
Risk Allocation Protection
Diligence

10. Indemnification Defined Term: Loss Caps, baskets Survival
Effect of Knowledge
Materiality Scrapes
Damages

11. Covenants Restrictive Covenants Types Non-solicitation Non-competition
Non-disparagement
Key Considerations
Duration
Geographical Scope
Defined Term: Business
Employee Matters
Termination of Employees
Compensation and Benefit Plans

12. Two Step Specific Provisions
Interim Covenants
Operation of the Business
Schedule Updates
Termination
Early Termination
Drop Dead Date
Deal Specific Termination Rights
Effect of Termination
Fees (reverse termination fees, break-up fees)
Closing Conditions
Regulatory Approvals
Required Consents
Deal Specific Conditions

13. Current M&A Market Competitive Market Buyers have cash
Buyers looking to middle market for value
Convergence of technology with retail and other industries
General State of the M&A Market

14. Recent Developments Recent political climate change Tax policy
Antitrust
Tariffs and Trade
Recent Example of Direct Impact on M&A Practice – CFIUS
What is CFIUS?
What did CFIUS do?
What changed?
Expansion of Authority
Cyber-security & Personal Data
Enhanced focus on China

15. Questions?