Acquisition agreements definition

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Seller's SPA drafting guide (unconditional completion)—checklist

Seller's SPA drafting guide (unconditional completion)—checklist This Checklist serves as a guide of certain key matters for the seller’s solicitors to consider when drafting, or commenting on, a share purchase agreement (also known as SPA or share sale agreement) recording the sale and purchase of the entire issued share capital of a private limited company, where the transaction involves simultaneous exchange and completion. Parties The drafter should: • check to see if the legal and beneficial title to the sale shares is split, ie check to see if the seller's sale shares are held in the name of a nominee, requiring the beneficial owner to: ◦ be named as the seller in the SPA instead of the registered holder, and ◦ procure the sale of the sale shares to the buyer • check to see if the transaction involves any parties connected with company directors, which may constitute substantial property transactions requiring certain approvals (see Practice Note: Substantial property transactions—requirement to obtain members’ approval) • resist proposals to include in...

Buyer's SPA drafting guide (unconditional completion)—checklist

Buyer's SPA drafting guide (unconditional completion)—checklist This checklist serves as a guide of certain key matters for the buyer’s solicitors to consider when drafting a share purchase agreement (also known as SPA or share sale agreement) recording the sale and purchase of the entire issued share capital of a private limited company, where the transaction involves simultaneous exchange and completion. Parties The drafter should: • check to see if the legal and beneficial title to the sale shares is split, ie check to see if the seller's sale shares are held in the name of a nominee, requiring the beneficial owner to: ◦ be named as the seller in the SPA instead of the registered holder, and ◦ procure the sale of the sale shares to the buyer • check to see if the transaction involves any parties connected with company directors, which may constitute substantial property transactions requiring certain approvals (see Practice Note: Substantial property transactions—requirement to obtain members’ approval) • check to see if the seller's obligations under...

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Private equity investment—the acquisition process

Private equity investment—the acquisition process The acquisition of a company or business and assets in the context of a private equity buyout, while similar to a standard acquisition in many respects, has a number of key differences. These derive primarily out of issues arising from the status of the various parties who form part of the process, namely the private equity investor, the management team and the buyer (or newco) as well as the seller. For further information on structuring a private equity investment, see Practice Note: Buyouts. This Practice Note considers the key areas of due diligence and the acquisition documentation. Due diligence As in any share or business and asset purchase transaction, management and the private equity investors will need to conduct their own due diligence investigations into the target business. Purpose The purpose of due diligence from the perspective of a buyer is to allow it to identify possible deal breakers at an early stage, to establish areas of risk and how...

Material adverse change and material adverse effect in facility agreements

Material adverse change and material adverse effect in facility agreements The concepts of material adverse change (MAC) and material adverse effect (MAE) are used in different but related ways in a typical facility agreement. • Material adverse effect—it is common for a facility agreement to include a definition of material adverse effect. The principal use of the material adverse effect definition is to qualify certain representations, undertakings and events of default • Material adverse change—a material adverse change in the circumstances of the borrower is often included as a separate event of default. This clause is typically negotiated extensively and there are several variations in scope. One common formulation of the MAC event of default is to refer back to the definition of material adverse effect. The borrower is also required to make a representation (which can be a repeating representation) that there has been no material adverse change to its business or financial condition since the date of the last financial statements provided to...

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Ireland—Legal due diligence commercial contract review template—private M&A—share purchase

Ireland—Legal due diligence commercial contract review template—private M&A—share purchase When carrying out legal due diligence it is likely that a review of material contracts will take place, following which each material contract will be summarised in a legal due diligence report. Using the same template for the review of each contract will assist the review process and make sure that there is consistency in the style and language used in the due diligence report itself. This template provides a checklist of the issues and contractual provisions that the lawyer in charge of due diligence wishes the rest of the legal team to consider and make note of when carrying out the review of commercial contracts. The reviewer should complete a separate contractual summary for each contract, making notes against each heading in this template in the space provided. When reviewing financing documents, joint venture agreements, articles, employee handbooks and acquisition agreements an amended version of this template may be used. If reviewing loan documentation, the reviewer may want to amend...