Privately held businesses are rarely bought or sold “as is.” Buyers of most businesses usually expect the sellers to make a comprehensive set of “representations” or “reps.” In other words, statements about the business that...more
Representation & Warranty Insurance (“RWI”) is specialty insurance coverage purchased for M&A deals which provides third-party insurance coverage for certain breaches of the Seller’s representations and warranties in the...more
Indemnification is a key component in virtually every M&A deal, serving as a detailed and nuanced contractual risk allocation device between the Buyer and Seller. Though drafted in a two-way fashion, indemnity operates in the...more
Net Working Capital (“NWC”) targets and purchase price adjustments are a nearly universal reality in private M&A deals, though often a neglected and misunderstood topic. To greatly simplify, the NWC target is the minimum...more
Every year, analysts at Allen & Overy review M&A data collected by the firm over the previous 12 months of deals. The analysts look for trends, year-on-year changes and differences in practice across the globe. Recently, we...more
Market Trends: What You Need to Know As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Point Studies: - The use of separate escrows for purchase price adjustments has been increasing on...more
Many purchase/sale transactions require payments into escrow. Sometimes counsel for one of the parties acts as escrow agent to keep the fees down. Providing such a service has its risks. In Alexander O&G, LLC v. Nomad...more
The Predicament - One challenge encountered in M&A deals is how to bind all shareholders of the target company to all deal terms. For private companies with few shareholders, this is not much of a challenge. However,...more
Marcellus Shale drilling was taking off, and the owner of an oil and gas service company fielded a buyout offer from a Wall Street private equity firm. Golden opportunity, right?...more
In this frothy, seller-driven M&A market, representation and warranty insurance can help bridge the gap between a buyer and seller and facilitate deal-making. In M&A transactions, a seller seeks to limit the extent to...more