M&A Boot Camp booklet 2023 - Flipbook - Page 43
6.
Delivery of legal opinion by counsel for the target company
7.
No exercise (or limited exercise) of statutory “appraisal” or “dissenters”
rights (if available) by target company stockholders
8.
“Due diligence out” – inclusion of such an “out” will typically be resisted
by the target company because of its broad scope; an acquirer with a “due
diligence out” may be viewed as having received a free “option” to decide
whether or not to proceed with the acquisition
9.
Financing “out” – also typically resisted by the target company
10.
Other conditions
F.
Conditions to the obligation of the target company (or its stockholders) to close –
will not necessarily mirror the conditions to the acquirer’s obligation to close
G.
Payment of transaction-related expenses – e.g., sales taxes (if required to be paid)
in a transaction structured as a purchase of assets; legal and accounting fees
incurred by the target company and its stockholders; Hart-Scott-Rodino Act filing
fee; investment banking fees
H.
Other provisions – e.g., provisions relating to employees; provision contemplating
payment of a termination or “break-up” fee
VIII. SPECIAL PROBLEMS POSED BY ACQUISITIONS OF DIVISIONS AND
SUBSIDIARIES
A.
Identification of business or assets being acquired; difficulties in dealing with
“shared” intellectual property rights and other “shared” assets
B.
Identification of liabilities being assumed
C.
Financial statement issues (including issues arising from inter-company
transactions and issues arising from unavailability of separate financial statements
for the division or subsidiary being acquired)
D.
Possible need for post-closing transition services agreements
E.
Federal income tax issues – especially important in an acquisition of a subsidiary
from a consolidated group
F.
Employee benefits issues
\NORTHCA - 703480/000300 - 2771781 v1
14