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

The Corporate Finance: Legal Issues 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). The School is designed to be highly practical and features hands-on workshop sessions and case studies. As mentioned above, the School is made up of 2 modules (you may book onto the entire School or just sign up to one or other of the modules):

Summary of course content for A Legal Guide to Mergers & Acquisitions (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
• The different ways to document M&A transactions
• Complex issues involved in acquisition and financing
• Best practice in postmerger integration

And new to this course to make it distinctive to all other M & A courses is the Course Director’s uniquely developed 10 Key Steps to Analyse any M&A contract and deals for lawyers and business professional to apply to any and all M&A contracts and deals.

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

Module 1

Day 1

Overview: Structuring and negotiating the acquisition

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

Workshop: Drafting the preliminary agreements

• Letters of intent
• Heads of terms
• Enforceability
• Information memorandum 'Subject to contract'
• Choice of law/jurisdiction Lock out
• Failed costs
• Binding or not Binding

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 Two

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

IP Due Diligence

• Importance of IP
• IP due diligence
• Ownership
• Warranties

Negotiating and drafting share purchase agreements - the general terms – Sample Document

• General structure
• Definitions
• Purchase Process
• The Contract
• Conditions Precedent
• Purchase price
• Restrictive Covenants
• Warranties & Indemnities
• Completion & Execution   ### Day Three###

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

• Warranties
• Seller protection
• Umbrella agreements
• Conditions to completion
• Goodwill

Corporate governance

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

Warranty claims

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

M & A Transaction Dynamics Impact Due To The Pandemic

• Buyers expectations – a more buyer friendly world reflected in agreements?
• Pre – closing undertakings expectations -operating a business ‘in the ordinary course’
• Equity or Cash – changes to current legal arrangements
• Price protection: Locked Box
• Valuation challenges – impact on documentation
• Project management – practical implications of suspended travel. Working from hope, illness.
• Cross border buyers
• Steps sellers can take in documentation during an “economic suspension”
• Material Adverse Effect (MAE) clauses
• Material Adverse Change (MAC) clauses – revision
• Force Majeure
• Remote closing
• Completed deals – efficacy of crisis management procedures

10 Key Steps to Analyse any M & A contract for lawyers and business professional to apply to any and all M & A contracts and deals

Case Studies

Module 2 - Private Equity: Legal Perspectives & Documentation

Day 4

PRIVATE EQUITY – What it is?

• Overview
• When is private equity used?
• The parties
• How is a fund structured?
• Identification of targets
• How do PE firms get money?
• How do PE firms create value?
• How PE firms control the target company through legal documents
• How do PE firms exit?
• Internal rate of return
• Provider’s ancillary issues
• Debt funders requirements
• Management requirements

The Deal Process and Preliminary Matters including Sample Documents

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

Principal documents and Business Plan

• Background
• Contractual structure
• Funds – Limited liability partnership agreement
• MBO – principal documents
• Acquisition - key documents
• Debt v Equity
• Loan v Debt
• Business plan

Limited Partnership Agreements and Private Equity Funds including Sample Document

• Limited liability partnerships - Purpose
• Limited Partnership Fund Structure
• Capital and Loan
• Loan Commitment
• Allocations, Sharing and Distributions of Partnership Profits
• Carried Interest
• Appointment and Removal of General partner
• Powers, Rights and Duties of the General Partner
• Powers of Limited Partner
• Withdrawal of Partners
• Fees and Expenses:
  • Management Fee
  • Establishment Costs
  • Transaction Costs
  • Fee Income of the General Partner
• Transfer of Interests – Limited Partners and General Partner
• Termination of Partnership
• Indemnification of General Partner

Day Five

Due Diligence in Private Equity Transactions

• Aims of the Investor
• Purpose - ‘caveat emptor’
• Relevance to warranty claims
• Management interest
• Limitations on Financial Recovery
• Interested Third Parties
• Social responsibility
• Conducting the Exercise

Management Due Diligence – Unique to Private Equity

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

Share Transfer Provisions in Equity Documents

• Equity Documents
  • Investment Agreement
  • Articles of Association
  • Service Agreements
• Lock – up and other restrictions
• Permitted transfers
• Pre – emption procedure
• Drag – along
• Tag – along provisions
• Compulsory transfer provisions
• Strip equity
• Sweet equity
• Leaver classification
• Time – based vesting
• Unfair dismissal
• Growth capital investment

Investment Agreement – including a sample agreement

Investment Agreement

• Conditions
• Mechanics of investment
• Warranties
• Investor controls
• Issues raised by management
• Corporate governance
• Minority protection
• Syndication
• Exit

Close of Course

Takeaway: Checklists and Sample documents