Cybersecurity (Continued)

Cybersecurity (Continued)

One of our first Deal Notes® (DN003) published on February 15, 2022, addressed the topic of Cybersecurity and the dramatically increasing occurrence of cybersecurity attacks on middle-market defense and aerospace companies. We advised that all such companies begin the process of becoming compliant with the new Department of Defense cybersecurity specification Cybersecurity Maturity Model Certification […]

CIMs: Safeguarding Value in M&A Transactions

CIMs: Safeguarding Value in M&A Transactions

The Confidential Information Memorandum (CIM) is a pivotal stake in the ground between sellers and potential buyers during a transaction. As alluded to in Deal Note 25, “Complete Disclosure”, the CIM crafts a strategic narrative that paints the business in the best possible light. However, there is a fine line between being optimistic and making […]

How Wide a Net?

How Wide a Net?

At the start of most engagements, clients usually ask us how many potential buyers we plan to contact. The basic answer is simple and straightforward. However, the risks and benefits associated with this question are significant, as discussed below. The success of a sale process is greatly influenced by the manner in which this issue […]

Indemnity Escrows

Indemnity Escrows

As I mentioned in my Deal Note® “The Rise of RWI”, written a year ago, Representations and Warranties Insurance (“RWI”) has become popular for larger transactions within the middle market of the aerospace and defense industry. However, it is not the only way to structure credit protection for breaches of the seller’s representations and warranties. […]

Hart Scott Rodino Guidelines

Hart Scott Rodino Guidelines

Often our clients are unaware of the Hart-Scott-Rodino Act (“HSR”) filing requirement that may apply to the planned sale of their business. Originally passed in 1976, HSR was intended to strengthen antitrust protections by requiring notice of large transactions.  When HSR requirements apply, the parties must make a filing with the Federal Trade Commission’s Premerger […]

Responding to the Market

Responding to the Market

Clients often ask us to provide a schedule for their sale process at the beginning of an engagement. And while certain preliminary activities are easy to predict and control, much of what happens during a sale is out of the control of the sellers and their M&A Bankers. Like a seasoned pilot, a seasoned M&A […]

Investment Banking Fees

Investment Banking Fees

When you begin to think about retaining an investment banker to sell your business, there are three key terms that you will want to consider regarding investment banking fees: Commission: Exactly how is the M&A Banker’s commission to be calculated? Is it based on the sale price? How exactly is the sale price determined? What […]

Purchase Agreement Schedules

Purchase Agreement Schedules

In almost all cases, when you sell your company, you will enter into a purchase agreement that will include Schedules. In most cases, the agreement will be drafted such that the seller will make representations about the business, supported by lengthy Schedules. The following are a few examples of purchase agreement Schedules: Equipment: you may […]

Projections Must Be Convincing

Projections Must Be Convincing

In determining their bid price, a buyer will model future cash flows using their best estimates of what the company is likely to generate in the years to come. Those estimates will be based only partially on the company’s own projections since most buyers are, not surprisingly, highly skeptical of figures that come from a […]

Preemptive Sale

Preemptive Sale

A Preemptive Sale is a sale negotiated with a buyer in a non-competitive environment. The benefits and risks associated with a Preemptive Sale are straightforward: The benefits include speed and confidentiality The primary risk is the possibility of selling for a price below what the market would bear In the public market, the risk of […]