mergers and acquisitions

A new M&A Corporate Development Report from Merrill DataSite and mergermarket was released this past week.  It addresses the M&A outlook for the coming year.  They report finding a largely positive view toward M&A deal volume and deal values for the upcoming 12 months, with 76% of the corporate executives and investment bankers interviewed anticipating increasing deal volume and 65% of them expecting deal values to increase in the same period.

The report also includes responses regarding approaches to corporate development within the organizations of the executives interviewed, with half
Continue Reading Positive M&A Outlook: Merrill DataSite and mergermarket Report

Earlier this week, I attended the TechNW 2011 conference organized by the Washington Technology Industry Association (WTIA). The conference was very informative and full of interesting presenters and topics. The corporate development panel discussion moderated by Tom Huseby (General Partner and founder of SeaPoint Ventures) was particularly interesting for startups (and relevant to my practice). The panelists were Neeraj Arora (Principal, Corporate Development at Google), Ryan Aytay (VP of Corporate Development at Salesforce.com), Ryan Cooper (Corporate Development Director at Microsoft), and Amin Zoufonoun (Director of Corporate Development at Facebook), all companies that have grown a great deal through partnerships as well as acquisitions of other companies. The general discussion surrounded merger and acquisition activities and drivers from the perspectives of Facebook, Google, Microsoft and Salesforce.com.

Two specific questions relating to the value of investment bankers in the M&A context and timing of the M&A process stuck out because they are questions that frequently come up with early stage companies.

Continue Reading Perspectives on M&A from Corp Dev Execs at Facebook, Google, Microsoft and Salesforce.com

This past week, mergermarket and Merrill Datasite released their report: Deal Drivers 2011 Half Year Report for the North American Region, providing an overview of January through June 2011 M&A activity.  M&A deals in the region have increased in volume by 51% (to 1,894 deals) and in value by 47% (for a total of US $526.6 billion) compared to the same period in 2010.  Volume was highest in the technology, media and telecom sector with nearly 350 announced transactions, while energy, mining, oil and gas deals were on top
Continue Reading M&A Deal Report for First Half of 2011 Released

Last week, the Delaware courts (Chancellor Strine) provided some interesting guidance for those concerned about time-limiting reps and warranties in purchase/merger agreements. The issue raised is whether a time-limited rep/warranty combineJohn Reed.jpgd with express termination language (i.e., a rep/warranty that survives for one year from closing then terminates along with any remedy for breach) effectively operates to shorten the statute of limitations on claims. Courtesy of John Reed, a partner in DLA Piper’s Delaware office, below is a brief summary of the case and a few key takeaways. The full text of the case is available here: GRT, Inc. v. Marathon GTF Technology, Ltd., No. 5571-CS (Del. Ch. July 11, 2011).

The provision at issue stated that certain “representations and warranties … will survive for twelve (12) months after the Closing Date, and will thereafter terminate, together with any associated right of indemnification … or the remedies provided …”  The plaintiff-investor argued that the Survival Clause should not be read as shortening the time period in which a claim for breach must be brought, but instead only as shortening the period of time in which a breach may occur subject to the ordinarily applicable three-year statute of limitations.  The Chancellor rejected the argument and held that “the contract plainly shortened the three-year statute of limitations applicable to breach of contract claims to one year.”

Continue Reading Survival of Reps and Warranties: Drafting Lessons from the Delaware Court of Chancery

The Q1 2011 mergermarket report on global M&A activity is out.  Highlights of the report, produced in conjunction with Merrill Corporation, include the following:

  • There have been 2,749 M&A transactions worth a combined US$617.1bn (through April 2011);
  • Energy sales make up the largest deal value (26.4% of global deal value);
  • The Telecom space is undergoing consolidation, with some large value deals announced; and
  • The private equity market is very active.  In the first quarter of 2011, 446 buyouts and 264 sales have occurred, with each in the US$55bn range.

Continue Reading Q1 2011 Global M&A Report

The Future of M&A, the mergermarket and Merrill DataSite report released earlier this month, reflects a strong expectation of increased merger activity in 2011 and 2012.  The technology, media, and telecom sectors are expected to see a significant increase in merger activity, along with energy/utilities. The report, based upon interviews conducted in the fourth quarter of 2010, also indicates a growing sense that the valuation gap between buyers and sellers is narrowing, along with more optimism regarding financing alternatives. 

Silicon Valley Bank has a new M&A report out as well, Private

Continue Reading M&A Activity Projections; Life Science M&A Report

Tyler Hollenbeck.jpg

CONTRIBUTED BY
Tyler Hollenbeck
tyler.hollenbeck@dlapiper.com

Although valuation is obviously the most critical variable in an exit event, the structure of the transaction can also have significant (and often surprising) effects on the consideration ultimately received by the sellers’ shareholders. Moreover, the buyer’s interests will generally be directly adverse to those of the seller with respect to deal structure. This is particularly true in deciding between an asset sale and a stock sale, where parties often adjust other elements of the deal (including valuation) in order to accommodate one side’s preferred structure. Accordingly, understanding the following three basic drivers of the asset versus stock sale question can significantly improve a founder’s negotiating position vis-à-vis potential purchasers.

Continue Reading Selling your Startup: Asset vs. Stock Sale