Mergers & Acquisitions

Restrictive covenants are unquestionably a significant deal consideration in M&A transactions. In the private equity context, a buyer is focused on restrictive covenants to protect its investment by binding the sellers and other recipients of material deal proceeds to obligations and restrictions for a certain period of time following the transaction. Restrictive covenants serve several purposes and are highly beneficial for a buyer; accordingly, absent any legal limitations and assuming sufficient consideration, a buyer is incentivized to impose restrictive covenants on as many selling parties as possible. However, and not surprisingly, sellers heavily negotiate their post-transaction restrictive covenant obligations to keep their business options as open as possible on a go-forward basis. The conflicting interests of buyers and sellers when it comes to restrictive covenants result in carefully negotiated covenants spread out over multiple transaction documents and employment agreements. This article discusses the common restrictive covenants used in private equity transactions, the importance of such covenants in the key transaction documents, and related enforcement considerations. 

Read about the key considerations private equity firms should make when doing business in the new Trump tariffs environment.  Read about the key considerations private equity firms should make when doing business in the new Trump tariffs environment.  

Negotiating and signing a Letter of Intent (LOI) is a key inflection point in the process of selling your business. Buyers and sellers both want the LOI to ensure a certain base level of understanding on certain key terms such as price, the structure of the deal, exclusivity, and confidentiality. However, sellers generally want, and should push for, additional details before agreeing to exclusively negotiate with a potential buyer. This article highlights key considerations for sellers to address in the LOI to protect their interests and set the stage for a successful deal.

Read about a Third Circuit ruling, which held that a creditor’s right to future royalty payments in a non-executory contract — an agreement in which one party has performed all material obligations and the other has not — could be discharged in the bankruptcy of a counterparty-debtor. The decision highlights the importance of properly structuring M&A, earn-out, and royalty-based transactions.

Read about the steps to implement a pre-transaction reorganization under Section 368(a)(1)(F), known as an F reorganization, on a target that is treated as an S corporation for tax purposes, which can offer significant tax benefits to buyers and sellers.

This week, the Antitrust Division of the U.S. Department of Justice (DOJ) reached one of its largest “gun jumping” settlements following allegations that sporting and entertainment events company, Legends Hospitality, illegally conducted business with its acquisition target, ASM Global Inc., prior to consummating their transaction.

The Federal Trade Commission (FTC)’s new rule to ban most post-employment non-compete agreements could significantly impact M&A and private equity transactions. Assuming it withstands legal challenges, the rule will require buyers and private equity sponsors to rethink many of their asset protection strategies.

Read about proposed Treasury regulations that provide guidance on the application of the stock buyback excise tax to redemptions and M&A transactions.

Amid ongoing growth in global M&A, buyers evaluating cross-border opportunities need to weigh many issues. Mintz M&A and antitrust attorneys look at considerations for European companies and private equity funds seeking targets in the United States, including US deal structures, antitrust regulations, and deal-reporting requirements.

Read about the BEA’s mandatory Benchmark Survey of Foreign Direct Investment in the U.S., its other investment reporting requirements, and implications of the rules for entities considering transactions.

Navigating the regulatory frameworks that impact health care transactions can be challenging. These frameworks have the ability to impact multiple aspects of a transaction, including timing, structure, and valuation. Knowing how to identify and avoid these regulatory pitfalls is critical to averting these challenges that can delay or break a deal. And, ultimately, it’s what you know that can make the deal.

In this advisory, we discuss a recent amendment to the Delaware General Corporation Law (DGCL) permitting a Delaware corporation to eliminate or limit the personal liability of certain officers of the corporation — for monetary damages to the corporation or its stockholders — for the breach of the fiduciary duty of care.

This advisory discusses how the Antitrust Division of the Department of Justice and the Federal Trade Commission restrict information sharing by buyers and sellers in a business combination transaction, or so-called gun jumping.

Read Week 1 of Mintz’s Sell-Side Series, Pre-Planning: Developing Your Goals and Defining Your Game Plan, for tips on setting goals for an eventual sale, building an external and internal team, managing employee relationships, and getting organized.

In the world of Mergers and Acquisitions (“M&A”), both buyers and sellers are placing greater emphasis on Environmental, Social, and Governance (“ESG”) credentials. 

This alert discusses the Delaware Supreme Court’s decision in Manti Holdings v. Authentix Acquisition Co. that upheld the enforceability of an advance waiver of statutory appraisal rights by common stockholders.

This advisory discusses how courts could interpret common terms in merger agreements, including material adverse change (MAC), material adverse event (MAE), and force majeure clauses and ordinary course of business covenants, in light of the COVID-19 pandemic.

Over the summer, we wrote about why health care companies may want to consider buying assets out of bankruptcy, taking advantage of the Bankruptcy Code Section 363 sale process (a "363 Sale”). We are back with our second post, to provide more detail to the process and discuss some pros and cons of 363 Sales.

As a refresher, a 363 Sale couples a flexible and fast process with ample liability protection for willing buyers. The primary benefit of a 363 Sale is that a buyer can acquire the debtor’s assets free and clear of virtually all liens, claims, and interests burdening the assets and the debtor. And when Section 363 is coupled with the “assumption and assignment” provisions of Section 365 of the Bankruptcy Code, a debtor is able to assign most contracts or leases that a buyer may wish to purchase, including contracts with ironclad anti-assignment language, provided that certain conditions are satisfied. When a target is experiencing severe financial distress, the benefit of acquiring assets “free and clear” is extraordinarily valuable.