M&A due diligence: when to negotiate warranties against potential blind spots

Jul 7, 2011 - by István Préda

Cat and mouse warranties
The extent and scope of warranties is one of the trickiest negotiation areas in selling or buying a private company. The buyer wants to make sure that the financial statements were true and fair and it had received all relevant information for his investment decision on closing, while the seller is afraid warranties will allow the buyer to claw back part of the purchase price after the deal. The most important areas to seek warranties are: the valuation of assets, off balance sheet items, related party transactions, pending litigations and potential tax liabilities.

M&A Master Class Series - Part 1 Recap

Sep 29, 2011 - by Joel Lessem

Recently I participated in the M&A Master Class webinar alongside Andrew J. Sherman, author and Partner at Jones Day.  What an incredible opportunity to listen to a leading authority on M&A, up close and personal. This session took listeners through not only his views on the current state of the market but also key steps to prepare for selling a company.  The slides to his presentation are posted on the Firmex website, but I thought I would re-iterate his views on the current state of the market, which he took us through in our conversation.

4 Tips on Closing a Buyer

Oct 7, 2011 - by Joel Lessem

I have spoken to many entrepreneurs and intermediaries.  Some of my peers in my CEO circle who are approached by a potential acquirer, are at times more focused on “what’s in it for me” versus their buyer’s mindset.  

Bottom line is first you need to qualify your buyer.  Once you’re satisfied you need to make sure you’re easy to deal with.  This should not be a tug of war.  It’s a courtship ending in a marriage! 

M&A Master Class Series - Part 2 Recap

Oct 20, 2011 - by Joel Lessem

Today, we once again enjoyed an enthusiastic and collaborative session with Andrew J. Sherman, author and Partner at Jones Day.  He took us through the Buy-Side perspective of M&A and focused on how to qualify your seller and uncover hidden value.

Building on his weather forecast in Part 1 of the series, Andrew alluded to the clouds parting for M&A in 2012.  Using a bullhorn he gave the call to action to Buyers, “Attention K-mart shoppers – deals to be had!”  Companies are sitting on $2.5 trillion and this value will be flowing back into the markets. Buyers need to be prepared to capitalize on the buyer’s market that currently exists but not to rush into acquisitions.  Vigilant due diligence is crucial.

‘Financial Reporting Valuation - The Market Participant’ a PCE Companies’ Perspective

Nov 14, 2011 - by Brett Cooper

ASC 820 - Fair Value Measurements and Disclosures sets forth the definition of Fair Value as "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date". Paramount to the definition is the concept of the "Market Participant".

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M&A Master Class Series - Part 3 Recap

Nov 18, 2011 - by Joel Lessem

Today, we once again enjoyed our third collaborative Master Class with Andrew J. Sherman, author and Partner at Jones Day.  He led us through his due diligence best practices and pitfalls with a Buy-Side perspective of M&A.

Andrew likened the due diligence process in M&A to dating, "Some people like to disclose everything on a first date, most of us reveal information about ourselves on a phased basis as we get to know the other party. The due diligence process in M&A is more akin to that, as long as you're not witholding information that would change the nature of the transaction." Transparency and openness are keys to conducting successful due diligence. Sherman added that, "Those who are successful in due diligence leave their ego at the door."

M&A Master Class Series - Part 4 Recap

Dec 9, 2011 - by Joel Lessem

Today we enjoyed our fourth collaborative Master Class with Andrew J. Sherman, author and Partner at Jones Day. He led us through his best practices to ensure success in post-close integration with a Buy-Side perspective of M&A.

Andrew spoke to the challenges in post-close integration. Citing at KPMG survey, Sherman agreed that cultural and people issues present the biggest challenge during the post deal period. He also referenced specific data points related to post-deal integration, citing a Deloitte survey Sherman highlighted that although the desired outcome of integration may be to rapidly capture cost & revenue, synergies were not achieved in 70% of cases.

The news wasn't all bad though, Andrew provided tips, tricks and checklists for retaining key employees, overcoming cultural issues, establishing a transition team and more.

What’s Ahead for the M&A Market in 2012 and Beyond? - Webinar Recap

Jan 17, 2012 - by Joel Lessem

Today we enjoyed an in-depth outlook of the M&A Market in 2012  with Dennis Roberts, author, Chairman and CEO at The McLean Group. His insights into how cross-border deals, technology, healthcare and an aging baby boomer population are affecting the M&A landscape, were invaluable.

Dennis spoke to the impact of new technologies on business, citing that 40% of S&P 500 companies were not there 10 years ago. He also discussed how an aging baby boomer population has accelerated growth in healthcare, pharma and biotech. He also referenced specific data related to the last year, revealing that in 2011,  one in three M&A transactions in the U.S. were cross border deals.

The Canada-US Regulatory Cooperation Council - Webinar Recap

Feb 29, 2012 - by Phil Adrien

Today we enjoyed an in-depth discussion of The Regulatory Cooperation Council (RCC) with Emily Larose, partner in the advocacy group at Cassels Brock. Her insights into how the RCC and the Border Action plan are impacting cross-border business in agriculture and food, transportation and pharmaceuticals were invaluable.

Emily spoke to the potential advantages of more standardized compliance requirements between Canada and the U.S., including streamlined production at a lower cost, streamlined transportation of goods and reduction in compliance issues.

Consumer Industry Primed for 2012 Recovery

Apr 10, 2012 - by Debbie Stephenson

A new report from KPMG International suggests that a global recovery in M&A activity in the food, beverage, consumer goods and retail sectors slowed in the second half of 2011. Findings suggest that macroeconomic forces, such as euro zone instability and challenges in arranging financing, were the main contributors.