November 19, 2009
ABA’s “2009 Strategic Buyer/Public Target Deal Point Study”
Recently, the ABA M&A Committee released its “2009 Strategic Buyer/Public Target Deal Point Study.” This is the latest in the Committee’s “Deal Point Study” series – and addresses deal points in public company transactions announced in 2008 in excess of $100 million in transaction value (ie. 103 transactions). Transactions involving private equity buyers were excluded as they will be covered by a separate study.
A few items to note:
1. The members of the M&A Committee’s “Strategic Buyer/Public Target Working Group” led by Jim Griffin of Fulbright & Jaworski are listed on slide 3 of the Study. I encourage you to reach out to those you know to congratulate them on a job well done. It’s a ton of work.
2. The study tested several new deal points in strategic deals this year, including the “compliance with law” rep, the closing condition regarding target’s covenant compliance, target operating covenant provisions, various new remedies data points (effect of termination, the express right of the target’s stockholders to sue for deal premium, and reverse term fees) and additional data points found in two-step transactions (tender offers).
3. The key to all of these studies is the release date in the lower right hand corner. All those interested in being at the negotiation table with the correct version of a study will be incentivized to maintain active membership in the Committee’s “Market Trends Subcommittee” so they’ll continue to receive Update Alerts.