Category: Acquisitions

M&A Today : July 2017 Issue

Read the latest edition of our M&A Today Newsletter.

An Overview of the Golden Parachute Payment RulesDavid M. Czarnecki

Often, executives of private companies have certain rights and benefits that are triggered upon a change in control, such as accelerated vesting of equity awards and payments under a management carve-out plan. These payments may result in significant tax penalties under Section 280G of the Internal Revenue Code, or the “Golden Parachute Rules”, unless appropriate action is taken by the company.

Read the article in this month’s M&A Today Newsletter to learn more about Section 280G.

Top Considerations – Sale of CompanyJoseph C. Marrow

Selling a business can be a once-in-a-lifetime opportunity to reap the rewards for years of efforts spent successfully growing a company, but it is critically important that the business is positioned to achieve a successful exit and there are a number of initial steps to be taken to prepare for a successful exit.

Learn more in this month’s M&A Today Newsletter.

M&A Non-disclosure Agreements: Drafting Considerations for Buyers and SellersScott R. Bleier

Selling a company can be a long and winding road with an inevitable exchange of confidential information between presumptive buyers and the selling company occurring throughout the course of a M&A transaction. Typically, the first document signed between a buyer and seller is a non-disclosure agreement (a “NDA”) which is designed to place restrictions on what each party may do with confidential information shared by the other party during the course of the buyer’s due diligence review of the seller.

For more information on NDAs, read the full article in our M&A Today Newsletter.

Download the full PDF newsletter.

2016 M&A Year in Review

The MBBP M&A team has extensive experience guiding clients through the complexities of M&A transactions in diverse markets. Over the last decade, we have represented hundreds of publicly-traded and privately-held companies in transactions, both buyers and sellers, valued from several million dollars up to hundreds of millions of dollars.

squares(Click image to see more.)

In 2016, MBBP completed a variety of M&A transactions in diverse fields such as the manufacture of window coverings and the delivery of real world Radio Frequency performance test solutions, and encompassing industries as varied as the streaming of panoramic and 360-degree video and the distribution of building products.

Read more about our 2016 M&A deals. Cheers to a successful year for our clients!

MBBP’s Shannon Zollo quoted in Corporate Counsel article discussing Facebook’s M&A due diligence of its acquisition of Oculus VR

In an article published in ALM’s Corporate Counsel, corporate partner Shannon Zollo commented on Facebook’s M&A due diligence ahead of its approximately $2 billion acquisition of virtual reality developer Oculus VR. SSZ Headshot Photo 2015 (M0846567xB1386)Video game creator ZeniMax Media Inc. sued Oculus, and Facebook once it purchased Oculus, on several allegations, including copyright infringement. In the trial, Facebook’s CEO Mark Zuckerberg was questioned about whether the one weekend his company was given to perform due diligence was enough time.

Shannon notes that “as a general rule, due diligence under normal conditions can take at least a few weeks, if not a few months”, and that proper due diligence could be difficult to conduct under such a short time frame, especially when intellectual property is a key component of the deal. Jury deliberations have begun in the trial.

For further detail on the case and on Shannon’s comments on due diligence, read the full article.

Revised HSR Thresholds 2017

By: Jonathan M. Calla

JMC Headshot Photo 2015 (M0846508xB1386)On January 19, 2017, the Federal Trade Commission (FTC) issued its annual press release announcing revised jurisdictional thresholds for 2017 in connection with reportable transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). These new HSR thresholds will go into effect 30 days after they are published in the Federal Register, which is expected to happen in late February.  The thresholds apply to transactions that satisfy the “size of transaction” test (transaction value) and the “size of person” test (either in terms of annual sales or total assets).  The thresholds are adjusted annually to reflect changes to the domestic gross national product.  The following chart reflects the increased thresholds from 2016 to 2017:

Test 2016 Threshold 2017 Increased
Threshold
Size of Transaction $78.2 million $80.8 million
Size of Person (smaller) $15.6 million $16.2 million
Size of Person (larger) $156.3 million $161.5 million
Size of Transaction (Size of Person Inapplicable) $312.6 million $323.0 million

Adjustments to the filing fees to be paid in connection with the transactions will be as follows:

  • $45,000 for transactions valued between $80.8 million but below $161.5 million.
  • $125,000 for transactions valued between $161.5 million but below $807.5 million.
  • $280,000 for transactions valued at or above $807.5 million.

Read the full text of the FTC Press Release.

Adjustments to civil penalty amounts for certain laws enforced by the FTC, including HSR, were also announced.  These new adjustments provide that any noncompliance with any requirements under HSR may subject any person, or any officer, director or partner of such person, to civil penalties of up to $40,654 for each day of violation.  This penalty was increased last August from $16,000 to $40,000 per day and will now be subject to annual adjustment to reflect changes to the domestic gross national product

All parties should carefully consider the implications of the HSR Act on all transactions and should consult with counsel to determine whether an HSR filing is required.

For more information please contact Jonathan M. Calla.

Registration Now Open: M&A Considerations for Venture-Backed Companies

VERY LIMITED SEATING! Join us on Thursday, May 19, for an impressive panel presentation by experienced deal makers providing an insider’s perspective on what it takes to successfully position a venture backed company for sale and get a deal done!  Our experts include Brady Bohrmann of Avalon Ventures, Ted Gillick of EMC Corporation, and Douglas Melsheimer of Bulger Partners. The panelists represent the unique perspectives of a buyer, seller, and banker and each brings years of experience in venture-backed M&A. This panel will be moderated by MBBP corporate attorney Jon Gworek.

Among the topics they will address:

  • How can a company best position itself for a successful exit?
  • Who are the various stakeholders in an M&A transaction and are their interests aligned?
  • What key considerations do buyers apply in assessing strategic fit?
  • What best practices will help ensure a smooth transaction when both parties want to get a deal done?

The event starts at 4:00pm at the Cambridge Innovation Center. Register today!

Carl Barnes Panelist on Fairness Opinions

CFB Headshot Photo 2015 (M0846497xB1386)MBBP Attorney Carl Barnes will be a panelist in the webinar “When and Why Should a Board Require an Independent Fairness Opinion,” presented as part of the BDO KNOWLEDGE Webinar Series program. The discussion will focus on what fairness opinions are, what they are not, valuation techniques, and the role fairness opinions play in helping directors to fulfill their fiduciary duties in M&A and other transactions.

This moderated panel will be held from noon to 1:00pm, Boston time, on May 5. To register, please visit BDO’s event registration page.

Shannon Zollo Panelist at AMAA New England Chapter Meeting

Attorney Shannon Zollo will be a panelist at the upcoming Alliance of Merger &SSZ Headshot Photo 2015 (M0846567xB1386) Acquisition Advisors New England Chapter meeting on Monday, May 9th from 4-7pm. The AMAA is the premiere international organization serving the needs of middle market M&A professionals worldwide through educational and transactional support. The New England Chapter serves as a more local resource for face to face connections, education, and professional opportunities.

This upcoming meeting is on the topic of “Bridging the Valuation Gap – Earn Outs”. Specifically, the panelists will discuss the use of earn outs in M&A, structural considerations, measurement methods, legal issues, tax implications, valuation and financial reporting, and potential pitfalls.

To learn more and to register, check out the AMAA New England Chapter Event page.

 

2015 M&A Year in Review

The MBBP M&A team has extensive experience guiding clients through the complexities of M&A transactions in diverse markets. Over the last decade, we have represented hundreds of publicly-traded and privately-held companies in transactions, both buyers and sellers, valued from several million dollars up to hundreds of millions of dollars.

deals(Click image to see more.)

Last year’s Mergers and Acquisitions front was no different. In 2015, MBBP completed a variety of M&A transactions in diverse fields such as oil and gas processing and email security and encryption, and encompassing industries as varied as digital game development and biotechnology, software architecture and optic lens assembly.

Read more about our 2015 M&A deals. Cheers to a successful year for our clients!

M&A Today: February 2016 Issue

Save the Date! The 2016 M&A Panel Series kicks off on Friday, April 29th!
Watch this spot. Registration will open soon!

This month’s M&A Today newsletter can be read in full here.

Tips for Enforcing Indemnification Provisions John J. Tumilty and Joseph C. Marrow

Your company has completed an acquisition of a strategic partner for a purchase price of $40 million. In the representations and warranties in the acquisition agreement, the seller informed you that its financial statements were true and correct as of the date of the closing. Post-transaction you discover that the financial statements, as presented, were inaccurate and misleading. What recourse do you have?

Read our tips on determining whether or not to make an indemnification claim.

Permanent Exclusion of Gain on Sales of Qualified Small Business Stock – Robert M. Finkel

Holders of certain qualified small business stock (QSBS) can permanently exclude 100% of up to $10 million of gain realized on the sale of QSBS. The benefit, provided for under Section 1202 of the Internal Revenue Code, was recently made permanent as part of the Protecting Americans from Tax Hikes Act (PATH) in December 2015. Entrepreneurs and investors will, of course want to consider the QSBS benefit when structuring investments; but QSBS benefits are sure to be an important consideration for both buyers and sellers when evaluating the economics of an exit transaction.

Learn more here.

IP Due Diligence: Patentability vs. Patent Infringement – Sean D. Detweiler

M&A transactions often require IP due diligence investigations when technology is involved, and it can be critically important to understand issues like what technology is owned by a company, what technological developments are in the pipeline that can be protected with patents, and whether the company has freedom-to-operate by making and selling their current or planned goods and services without infringing another’s patent rights. Understanding the difference between patentability and patent infringement is important to understanding the overall IP position.

Read the full article here.

 

Download the PDF newsletter.

Revised HSR Thresholds 2016

By Jonathan M. CallaJMC Headshot Photo 2015 (M0846508xB1386)

On January 21, 2016, the Federal Trade Commission (FTC) issued its annual press release announcing revised jurisdictional thresholds for 2016 in connection with reportable transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).  These new HSR thresholds will go into effect 30 days after they are published in the Federal Register, which is expected to happen prior to the end of January, 2016.  The thresholds apply to transactions that satisfy the “size of transaction” test (transaction value) and the “size of person” test (either in terms of annual sales or total assets).  The thresholds are adjusted annually to reflect changes to the domestic gross national product.  The following chart reflects the increased thresholds from 2015 to 2016:

Test 2015 Threshold 2016 Increased Threshold
Size of Transaction $76.3 million $78.2 million
Size of Person (smaller) $15.3 million $15.6 million
Size of Person (larger) $152.5 million $156.3 million
Size of Transaction (Size of Person Inapplicable)  $305.1 million  $312.6 million

Adjustments to the filing fees to be paid in connection with the transactions will be as follows:

  • $45,000 for transactions valued between $78.2 million but below $156.3 million.
  • $125,000 for transactions valued between $156.3 million but below $781.5 million.
  • $280,000 for transactions valued at or above $781.5 million.

Read the full text of the FTC Press Release here.

All parties should carefully consider the implications of the HSR Act on all transactions and should consult with counsel to determine whether an HSR filing is required.

For more information please contact Jonathan M. Calla.