Legal Issues (Corporate Finance School)

Enrich your knowledge of the legal issues surrounding M&A, LBOs and debt restructuring

Corporate Finance School: Legal Issues is made up of 2 individually bookable modules:

• Module 1: Mergers & Acquisitions: A Legal Guide to M&A (Corporate Finance School)
• Module 2: Private Equity: Legal Perspectives & Documentation (Corporate Finance School)

The Corporate Finance School comprises two modules, which together offer delegates a comprehensive and practical guide to the international sale and purchase of companies from a strategic, legal, commercial and financial viewpoint.

The School aims to give participants a thorough knowledge and understanding of the wide variety of skills that those involved in cross border acquisitions must possess – including the ability to read and understand financial information, as well as juggle a diverse range of commercial and legal issues from an international viewpoint.

As well as this, the School gives delegates the opportunity to look in detail at a closely related area to M&A, namely Private Equity or Joint Ventures & Strategic Alliances (depending on course location).

Summary of course content for Mergers & Acquisitions - A Legal Guide to M&A

• How to structure a deal and value the target
• How to negotiate the preliminary agreements and understand other complex pre-contractual issues
• The complexities of legal due diligence
• Technical legal issues, including intellectual property (IP) rights
• The different ways to document M&A transactions
• Complex issues involved in acquisition and financing
• Best practice in post-merger integration

Summary of course content for Private Equity - Legal Perspectives and Documentation

• The total deal process and preliminary matters
• Legal risk management in private equity
• Key steps in a comprehensive due diligence
• Development of strategic business plan
• A holistic acquisition and investment agreement

Agenda

Day 1

Overview: Structuring and negotiating the acquisition

• Context of the acquisition
• The selling process
• Valuation issues
• Other pre-sale issues

Transaction management

• Instructing counsel
• Engagement letters
• Contractual protection
• Analysing accounts
• Use of technology

Workshop: Drafting the preliminary agreements

• Letters of intent
• Heads of terms
• Enforceability
• Confidentiality undertakings
• Information memorandum
• 'Subject to contract'
• Choice of law/jurisdiction
• Lock out
• Failed costs

Workshop: Confidentiality agreements

• Dealing with confidential information
• Types
• Drafting agreements
• What is confidential information?
• Types of disclosure
• Commercial confidences
• Drafting a confidentiality agreement

Valuation concept for non-finance people

• Process
• Discounted cash flow
• Return on investment
• Price earnings ratio
• Similar transactions
• Net asset value

Day 2

Legal due diligence

• Reviewing significant contracts
• Regulatory compliance with laws
• Insurance coverage and related issues
• Litigation and claims
• Understanding regulatory consents and hurdles to the proposed transaction
• Dealing with specific cross border complications

Workshop: Drafting a disclosure letter

• Vendor's approach
• Purchaser's approach
• Knowledge
• How full and complete?
• Example
• Checklist

Intellectual property rights

• Key IP rights
• IP due diligence
• Ownership
• Warranties

Negotiating and drafting share purchase agreements - the general terms

• General structure
• Definitions
• Purchase price
• Closing procedure
• Arbitration
• Tax deed

Is it necessary?

• Deed or warranty
• Scope
• Checklist
• Drafting

Day 3

Key clauses – Comparative law implications

• Letter of intent
• Best endeavours, best efforts, reasonable endeavours
• Confidentiality clauses
• Penalty clauses
• Force majeure
• Hardship

Corporate governance

• Codes
• Directors
• Fiduciary duties
• Investors
• Audit committee
• Information flow

Warranty claims

• Indemnities
• Warranties
• Making a claim
• Damages
• Misrepresentation
• Limitation of liability

Workshop: Negotiating and drafting share purchase agreements – the specific terms

• Warranties
• Seller protection
• Umbrella agreements
• Conditions to completion
• Goodwill
• Post merger integration
• Why bother?
• Pre-merger preparation
• Going for the real win - post merger integration that works

Case Studies

Day 4

What is Private Equity?

• Fund structures
• When is private equity used
• The parties
• Internal rate of return
• Provider’s ancillary issues
• Debt funders requirements
• Management requirements

The Deal Process and Preliminary Matters

• Overview
• Engaging advisers
• Engagement letters
• Limitations of liability
• Proportionality
• Heads of agreement
• Confidentiality

Principal Documents and Business Plan

• Background
• Contractual structure
• MBO – principal documents
• Acquisition - key documents
• Debt v Equity
• Loan v Debt
• Business plan

Managing the Transaction

• Preparation
• Offer
• Transaction management
• International transactions
• Completion

Due Diligence

• Types of Due Diligence
• Lawyer’s role
• Process
• Relevance to warranty claims
• Accountants Due Diligence
• Legal Due Diligence
• Due Diligence Report

Valuation for Non-Financial People

• Process
• Discounted cash flow
• Return on investment
• Price earnings ratio
• Similar transactions
• Net asset value

Management Due Diligence

• Managing expectations
• Best practice
• Deal structures
• Intelligence gathering
• Searches
• References
• Profiling management teams and chairperson
• Evaluations

Day 5

Acquisition Agreement

• Parties
• Price
• Risk allocation
• Conditionality
• Consequences of conditionality

Investment Agreement - Part One

• Conditions
• Mechanics of investment
• Warranties
• Investor controls
• Issues raised by management

Investment Agreement - Part Two

• Corporate governance
• Minority protection
• Syndication
• Exit

Articles of Association

• Share structure and core share rights
• Voting
• Dividends
• Return of capital and allocation of share proceeds
• Ratchet
• Share transfers
• Directors
• Quorum
• Class rights

Warranties

• Warranties, guarantees and indemnities
• Limitations
• Knowledge and awareness
• Disclosure letter

Exits

• Exit planning
• Due diligence
• Share sale
• Warranties and covenants
• Completion accounts and locked box mechanisms
• Restrictive covenants
• Confidentiality
• IPO’s

Takeaway: Checklists and Sample documents