Closing mechanisms to improve deal performance and reduce risks

By William Jefferson Black

Although it’s common for M&A professionals to consider purchase agreement mechanisms - including lock-boxes, earnouts, and other highly negotiated accounting items - as purely an area for risk reduction. We’ve found some of the most sophisticated dealmakers are also using these areas of the purchasing agreement to bridge valuation gaps, incentivize the sellers to perform, and improve financial integration.

As the deal negociations get underwary, it can be very challenging to determine the best closing approach for adjusting...

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A conversation with Professor Stephen G. Morrissette on M&A strategy during shaky markets

By William Jefferson Black & Prof. Stephen G. Morrissette

Although it’s difficult to assess the turbulence in today’s M&A environment, dealmakers face some exciting opportunities. 

In this wide ranging discussion with Stephen G. Morrissette, Ph.D, is a Visiting Professor of Strategic Management at the University of Chicago's Booth School of Business, we discussed M&A strategy during shaky markets and the challenges that are unique to periods where deal flow slows.

According to Professor Morrissette, a classic mistake is.....

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Transaction insurance reshapes risk negotiations and post-close remedies

Transaction insurance reshapes risk negotiations and post-close remedies
By Ms. Elizabeth Cunnane & Mr. Saswat Bohidar & Mr. Christian McGrath

This session with Elizabeth Cunnane, Senior Vice President, M&A Group at Willis Towers Watson; Saswat Bohidar, Associate General Counsel, M&A and Ventures at Hewlett Packard Enterprise; and Christian McGrath, General Counsel & Managing Director at GTCR considered risk allocation frameworks.

The participants discussed the form and structure of closing conditions, looked at the increasing use of transaction insurance in high-value deals and in competitive processes, and discussed the strength of various protections and...

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Innovation in deal structures and forms of consideration

Innovation in deal structures and forms of consideration | M&A Conference at the University of Chicago
By Elizabeth Donley & Mr. Brett Shawn & Mr. Michael T. Wolf

This discussion at the M&A Conference at the University of Chicago examined deal structures and terms that may be employed to bridge gaps between buyers and sellers. 

Brett Shawn, Senior Vice President, Assistant General Counsel at Warburg Pincus; Michael Wolf, Vice President, Deputy General Counsel at Baxter International; and Elizabeth Donley, Partner at Hogan Lovells considered various forms of consideration and pricing formulations, including working capital and "locked-box" adjustments, fixed price/exchange ratio collars, valuation and earnout mechanisms, and other practical considerations relevant to M&A negotiations and...

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Aligning contractual language and closing mechanisms in the purchase agreement

Aligning contractual language and closing mechanisms in the purchase agreement
By Ms. Jelena Guzenko & Mr. Mohit Singh & Mr. John O'Brien & Ms. Christen Morand

This panel convened to discuss methods for refining the terms of a purchase agreement, drawing on perspective from Jelena Guzenko, Director of M&A and Post-Closing Management at Siemens, John O’Brien, Vice President of Corporate Development at Brooks Automation, and Mohit Singh, Senior Vice President at BP.

Christen Morand, a Partner in EY's Forensic & Integrity Services practice led the discussion and provided guidance on a number of accounting structures including earnouts, lock-boxes, and other sophisticated mechanisms.

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