Blog – Page 2

25

Feb

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Asset Purchase Agreement (APA), Transaction Agreements

The Asset Purchase Agreement, Acquired Assets; Assumed Liabilities

The Asset Purchase Agreement, Acquired Assets; Assumed Liabilities In my last post, we continued a section by section analysis of an asset purchase agreement (APA) with a discussion of the importance of the ‘Definitions’ section. Today, I will briefly cover the ‘Purchase and Sale of Acquired Assets; Assumption of Assumed Liabilities’ in an APA. While the first few posts of our APA series (‘Recitals’ and ‘Definitions’) probably seemed somewhat mundane on the surface, this next section covers tremendously important ground, particularly when considering what makes an Asset…

22

Feb

By Mike Firmage

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Asset Purchase Agreement (APA), Definitions, Transaction Agreements

The Asset Purchase Agreement, Definitions

The Asset Purchase Agreement, Definitions A few posts ago, I began a section by section commentary of an asset purchase agreement (APA) using a genericized composite of deal docs I’ve used in past sell-side deals. In my first post of the series, I covered the ‘Recitals’ section of the agreement. Today, I will briefly cover ‘Definitions’ in an Asset Purchase Agreement. While the first few posts of our APA series (‘Recitals’ and ‘Definitions’) are somewhat mundane on the surface, it is important to remember that a contract’s…

18

Feb

By Mike Firmage

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Transaction Agreements

The Asset Purchase Agreement, Recitals

The Asset Purchase Agreement, Recitals In my most recent post, we completed our discussion of the net working capital adjustment. Parts I, II, and III of the series defined net working capital, identified why such an adjustment exists, and analyzed one extremely important component of the adjustment: deferred revenue. This week, we begin a section by section analysis of an asset purchase agreement (APA) using a genericized composite of deal docs we've used in past sell-side deals. This week, we’ll cover the ‘Recitals’ section of the agreement.…

15

Feb

By Mike Firmage

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Asset Purchase Agreement (APA), Transaction Agreements

The Asset Purchase Agreement, Topics Covered

The Asset Purchase Agreement, Topics Covered The Asset Purchase Agreement: Topics Covered As indicated in my last post (NWC, Part III), today (2/15/2019), I’ll begin a section by section analysis of an Asset Purchase Agreement ("APA") using a genericized composite of deal docs similar to ones I've used in past sell-side deals. Specific APA sections and issues that I will cover over time include: APA Recitals Article/Section: ‘Definitions’ Article/Section: ‘Purchase and Sale of Acquired Assets; Assumption of Assumed Liabilities’ Article/Section: ‘Consideration; Purchase Price Adjustments; and Escrow Releases’…

11

Feb

By Mike Firmage

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Net Working Capital Adjustment, Net Working Capital Target, Transaction Terms

The Working Capital Adjustment, Part III

The Working Capital Adjustment, Part III This week we wrap our net working capital (NWC) series with a discussion of a common pitfall that sellers should guard against when negotiating a working capital adjustment. A deferred revenue liability, if improperly considered in NWC adjustment negotiations, can be used to dip into a seller’s pocket post-closing. In Parts I and II of the series, we defined net working capital and identified the fundamental reason that it is important (Part I). We also introduced the philosophical rationale for including…

04

Feb

By Mike Firmage

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Net Working Capital Adjustment, Net Working Capital Target, Transaction Terms

The Working Capital Adjustment, Part II

The Working Capital Adjustment, Part II This week we pick back up Part II of our net working capital discussion with a question: is it possible for a seller to drain his company of cash just before transaction close? If so, when and how can he do it? Last week I began this Agility Growth series with an analysis of the net working capital adjustment. In Part I of the discussion, we defined net working capital and identified the fundamental reason that it is important in a…

28

Jan

By Mike Firmage

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Net Working Capital Adjustment, Net Working Capital Target, Transaction Terms

The Working Capital Adjustment, Part I

After months of negotiations have resulted in an agreement on purchase price, it’s easy to think that everything important has been decided in an M&A transaction. But that’s not the case. In my career, I have routinely found that many key terms involved in a deal between buyer and seller often come as a surprise to bootstrapping entrepreneurs. As a deal gets into serious due diligence, bankers and lawyers begin to circulate drafts of definitive deal documents. The documents are dense. So it’s easy to miss that…