The Mergers & Acquisitions Market Trends Subcommittee of the Mergers and Acquisitions Committee of the American Bar Association Business Law Section (I dare you to say that name five times fast!) has released its 2011 Private Target Mergers & Acquisitions Deal Points Study (For Transactions Completed in 2010). It's available to members of the ABA's M&A Committee here: http://apps.americanbar.org/dch/committee.cfm?com=CL560003. Dallas's own Wilson Chu co-chairs this project.
The annual Deal Points Study contains a tremendous amount of valuable information for M&A participants regarding deal terms actually negotiated in transactions which are publicly disclosed. This year's survey looked at 100 acquisitions of private companies by publicly traded buyers with transaction values between $25 million and $960 million which were completed in 2010.
The beauty of the Deal Points Study is that it gives the deal lawyer something tangible to point to when arguing that a particular deal point is (or is not) "market." For example, let's say the buyer in an M&A transaction is demanding a "full-disclosure" representation and warranty from the seller, which would provide that, in addition to the reps and warranties specifically set forth in the acquisition agreement, the seller must also promise that the seller is not aware of any other material fact about the business that has not been disclosed to the buyer. The buyer and its counsel will likely argue that such a full-disclosure rep is one they "always" get from sellers and what is typical in the "market." The seller and its counsel will probably take the opposite position. A seller armed with the Deal Points Study could point out that 63% of the deals closed in 2010 excluded such a full-disclosure rep. While that won't end the debate, it's certainly more persuasive than a general comment such as: "That's not what we've been seeing in the market."
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