IPOs and M&A

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As readers of this blog know, Washington State is proposing new rules that will require more fund managers to become registered investment advisers.  These rules were originally proposed in the second half of last year and, in response to preliminary comments, the Securities Division of the Washington State Department of Financial Institutions (DFI) proposed new rules for comment by May 21, 2013.  Quoting from the DFI’s Notice to Interested Parties dated March 27, 2013:

In August 2012, the Securities Division circulated an early draft of rule amendments to the interested parties list. We also conducted a small business economic impact survey. In response to comments received from interested persons, and in response to the results of the small business economic impact survey, the Securities Division made certain changes to the proposed rules compared to the earlier draft…

The Securities Law Committee of the Business Law Section of the Washington State Bar Association, representing attorneys practicing in this area throughout Washington State, submitted formal comments to the DFI’s request.  Their comment letter is included below.  Full disclosure, I’m not a member of the Committee, but they asked me to help them in drafting their formal response with respect to how the rules relate to private fund advisers.Continue Reading Comment Letter Response to Washington State’s Plans to Regulate More Fund Managers

Congratulations to Vanessa Fox, one of the Women in Tech we’ve profiled in the past.  Vanessa has joined forces with RKG, a search and digital marketing agency, combining her enterprise-level search analytics platform with the fast growing agency.  Some of the press around the deal can be found on Geekwire, Business Wire and RKG’s Blog.
Continue Reading Vanessa Fox and Nine by Blue Join RKG

Article prepared by and republished courtesy of Ed Batts of DLA Piper; originally published here.

Negotiation fatigue is an age-old problem in completing any contract – and often, whether fair or not, the further back in the document the clause is positioned, the greater the fatigue.

A choice-of-law provision, which decides which jurisdiction’s law shall govern the contract, is almost always near the last clause in a contract. How often have dueling sets of lawyers (and more frequently, frazzled and puzzled clients who simply want a contract done before the end of the quarter) exhausted themselves on other provisions, only to trade away choice of law for a perceived gain elsewhere in the document?

Delaware Vice Chancellor Donald Parson’s February 22 decision in Meso Scale Diagnostics vs. Roche Diagnostics (Delaware C.A. No. 5589-VCP) highlights how important this seemingly mundane provision can be years later in a change-of-control situation. It also highlights a potentially critical divergence between Delaware and California state law.Continue Reading Delaware affirms that reverse triangular mergers do not trigger contract clauses generally prohibiting assignment

On February 22, 2013, in its Meso Scale Diagnostics, LLC v. Roche Diagnostics GMBH decision, the Delaware Court of Chancery held that a reverse triangular merger is not an assignment by operation of law, meaning that licensor consent is not required for the surviving entity to retain the target company’s rights, benefits and obligations under an existing technology license.

For background, in a prior post, we discussed the impact of common M&A structures, as well as the impact of common anti-assignment provisions, on the assignability of contracts of the…
Continue Reading New Delaware Chancery Opinion Affecting License Rights in Mergers

pic-trent.jpgCONTRIBUTED BY
Trent Dykes
trent.dykes@dlapiper.com

Compliments of our colleague Christopher Paci, the Chair of DLA Piper’s US capital markets practice, below is a review of 2012 US equity and debt capital markets activity.

Equity.  US equity and equity-related proceeds totaled $244.5B from 795 deals, a 32.7% increase compared to 2011. IPOs accounted for $40.9B, or 16% of the total, in 2012, up 18% from 2011 (excluding Facebook, down 27%). Follow-on equity offerings represented $182B, or 74%, of the total, up 45% from 2011.

IPOs.  Overall, the IPO market was modestly more active in 2012, with 128 deals closed, up 2% from 2011. IPO activity consisted mainly of smaller deals. 2012 got off to a strong start, with a forward calendar that included the most anticipated deal in years (Facebook). However, Facebook’s troubled debut on Nasdaq coupled with the recurring European debt crisis led to the IPO window closing during May and June. IPO activity returned intermittently in the second half of 2012, but uncertainty surrounding the fiscal cliff and the impact of Hurricane Sandy contributed to a disappointing end of the year. Of particular note:Continue Reading 2012 US equity and debt capital markets activity in review

RadcliffeMark.jpgCONTRIBUTED BY
Mark Radcliffe
mark.radcliffe@dlapiper.com

The Wall Street Journal (WSJ) recently noted the increasing importance of the corporate venture capitalists in the innovation ecosystem. WSJ base their conclusion on a recent Boston Consulting Group (BCG) report that describes the change in corporate venture capital.

I have seen three of the four cycles in the BCG report and I agree that this cycle is different because of the critical role of innovation in large companies. Innovation has become essential for large corporations and corporate venture is a significant tool to manage…

Continue Reading Corporate Venture Capital: Critical Players in the Startup Infrastructure

CONTRIBUTED BY

Criddle.jpg
Kevin Criddle
kevin.criddle@dlapiper.com 
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Anthony Kappus
anthony.kappus@dlapiper.com

One of the key considerations in structuring merger and acquisition (M&A) transactions is determining which contracts of the target company, if any, will remain in effect for the acquiror following closing.  This post will briefly outline: (1) the general rules of contract assignment; (2) the effect of anti-assignment clauses and other exceptions to the general rule of assignability; and (3) the effect of four common M&A structures on contract assignment.

General Rule: Contracts are Freely Assignable

The general rule is that contracts are freely assignable unless the contract itself, a statute, or public policy dictates otherwise.  This is true in Washington State, where courts have found that contractual rights are generally transferable unless the contract expressly prohibits assignment in “very specific” and “unmistakable terms.”

Exceptions to the General Assignability Rule

The exceptions to the general rule of free assignability fall into two broad categories: (1) contractual prohibitions on free assignability (“anti-assignment clauses”) and (2) case law prohibitions on free assignability of certain types of contracts that arise out of public policy concerns.Continue Reading Assigning Contracts in the Context of M&A Transactions

Batts, Ed_Headshot.jpgCONTRIBUTED BY
Ed Batts
ed.batts@dlapiper.com

Managing leadership succession in the misnomered “merger of equals” or the more common combination of two large public companies of different sizes can often be tricky. To the extent that both the buyer and the target agree that one or more members of a target’s management team are to transition to management positions in the combined company, merger contracts often specify who shall become what.

But such provisions are rarely drafted to be effective for any period of time beyond the closing. Further, buyers are loath…

Continue Reading When Public Companies Combine – Managing Leadership Succession

CONTRIBUTED BY
Trent Dykes and Kerra Melvin

Selling your company can be an exciting and overwhelming process. In addition to the complexity of negotiating the terms of your merger or asset sale, you will inevitably be bombarded with tons of deal-related jargon. Enter one such term, Internal Revenue Code (IRC) Section 280G (280G) or the “golden parachute payment” rules, a federal tax provision that comes into play when there is a change in control of a corporation. 280G impacts both the corporate entity and its executives, shareholders, and other “highly compensated individuals” associated with the corporation and imposes harsh tax consequences if not properly addressed. This post will provide a high-level summary of 280G, discuss when 280G applies, ways to avoid 280G liability, and how to calculate individual tax liability (under IRC § 4999) if 280G does apply.Continue Reading Understanding Section 280G and Golden Parachute Payments

CONTRIBUTED BY
Ed Batts

At a recent American Bar Association meeting, a senior Securities and Exchange Commission official reviewed various aspects of interest for public company reporting and compliance purposes. As is customary, such Staff comments were on a non-attribution basis and were represented to be personal views only and not those of the SEC as a whole. Nonetheless, such informal commentary continues to offer contextual perspective on both current matters and, equally important, indicates areas of less current significance at the SEC.Continue Reading Senior SEC Official Comments on Key Public Reporting Disclosure Issues