Cover	1
	Title Page	5
	Copyright	6
	Contents	9
	Preface	13
	Acknowledgments	17
	Chapter 1: Structuring Fundamentals	21
	Basic Corporate Finance Concepts	21
	Valuation Theory	21
	Comparing Investments	22
	Element of Risk	23
	Risk and Portfolio Theory	23
	Portfolio Theory as Applied to Acquisitions	24
	Efficient Market Hypothesis	26
	Reasons for Acquisitions	27
	Three Basic Acquisition Structures	31
	Stock Purchase	32
	Merger	32
	Asset Purchase	34
	Structuring Considerations: Overview	34
	Tax	34
	Corporate Law	37
	Securities Laws	38
	Antitrust and Other Regulatory Considerations	38
	Acquisition Accounting	39
	Chapter 2: The Acquisition Process	40
	Overview	40
	Valuation of the Business	47
	Relative Valuation	48
	Discounted Cash Flow Analysis	50
	Investment Bank Engagement Letters	50
	Confidentiality Agreements	55
	Letters of Intent	57
	Stay Bonuses and Other Employee Retention Arrangements	59
	Business and Legal Due Diligence	62
	Intellectual Property Due Diligence	75
	Components of Intellectual Property: Overview	75
	IP Due Diligence	85
	From Signing to Closing	86
	Appendixes	87
	Chapter 3: Corporate (Nontax) Structuring Considerations	89
	Business Objectives and Other Nontax Structuring Considerations	89
	Residual Minority Interest	91
	Deferred Closings	92
	Need for Consents	93
	Misrepresentations and Indemnification	94
	Liability Avoidance	95
	Appraisal Rights	96
	Sale of Control at a Premium	97
	Substantially All Assets	97
	Acquisition Structure Diagrams	98
	Forms of Acquisition Consideration	98
	Debt	103
	Subordination Terms and the Analysis of the Risks of Holding Debt	110
	Other Aspects of Subordination	113
	Cash, Stock, and Earnouts	116
	Cash	116
	Stock	116
	Earnouts	118
	Successor Liability and the De Facto Merger Doctrine	121
	Securities Law Compliance	124
	Overview	124
	Private Placements	125
	Private Placements in the Acquisition Context	130
	Securities Laws from the Target’s Perspective	132
	Antitrust Compliance: Hart-Scott-Rodino Act	134
	Filing Requirement	135
	Other Possible HSR Transactions	136
	Waiting Period	137
	Filing Requirement Flowchart	138
	Gun Jumping: Impermissible Activities during the Waiting Period and before Closing	140
	Equity Compensation	140
	Accelerated Vesting on an Acquisition or IPO	143
	Tax Aspects of Stock Options and Restricted Stock	144
	Nonqualified Stock Options	145
	Incentive Stock Options	146
	Restricted Stock	148
	Employment Agreements and Noncompetition Covenants	150
	Examples of Cause Definitions	152
	Examples of Negotiating Points	153
	Indemnification	156
	Noncompetition Covenants	156
	Additional Considerations	157
	Employment and Benefits Law	158
	General Employment Issues	158
	Types of Benefit Plans	159
	Acquisition Accounting	160
	Recapitalization Accounting	164
	Cross-Border Acquisitions	165
	Appendixes	165
	Chapter 4: Tax Considerations	166
	Taxable Versus Tax-Free Transactions: Overview of Relevant Situations	166
	Detailed Analysis of the Positions of the Target and Its Owners and of the Buyer	168
	Nature of the Target’s Business Organization	168
	Nature of Equity Owners	168
	Tax Position of the Buyer	169
	Taxable Transactions and Their Tax Effects	170
	Taxable Transactions Treated as Stock Purchases	170
	Transactions Treated as Asset Purchases	171
	Installment Sale Treatment and Contingent Purchase Prices	172
	Tax-Free Transactions	174
	Tax-Free Transactions Where the Target and the Buyer Are Both Corporations	174
	Tax Consequences to the Target Shareholders	177
	Treatment of Corporations Party to a Reorganization	179
	Special Situations	179
	Acquisitions from a Consolidated Group	179
	ESOP Transactions	180
	Dispositions of Unwanted Assets and Spin-Offs	181
	Acquisitive Transactions Where Either the Buyer or Seller Is Not a Corporation	182
	Management Tax-Free Rollovers in LBOs	183
	Golden Parachute Tax	184
	Background	184
	Basic Provisions	185
	Exceptions	186
	Planning Techniques	187
	Chapter 5: The Definitive Acquisition Agreement	189
	Economic Terms	189
	Introductory Paragraphs	189
	Article I: The Merger	194
	Article II: Conversion and Exchange of Shares	195
	Special Issues for Articles I and II	197
	Representations and Warranties	204
	Article III: Representations and Warranties of the Target and the Shareholders	208
	Article IV: Representations and Warranties of the Shareholders	214
	Article V: Representations and Warranties of Parent [Buyer] and Merger Sub	214
	Covenants	216
	Article VI: Covenants of the Target	216
	Article VII: Covenants of Buyer	219
	Additional Agreements	219
	Article VIII: Additional Agreements	219
	Conditions to Closing	220
	Article IX: Conditions Precedent	220
	Survival of Representations and Indemnification	221
	Article X: Survival	221
	Termination	226
	Article XI: Termination	226
	Miscellaneous	226
	Article XII: Miscellaneous	226
	Representing Targets: A Summary	227
	Appendixes	230
	Chapter 6: Acquisitions of Public Companies	231
	Public-to-Public Mergers: What is Different?	231
	Case Law-Developed Fiduciary Duties and Standards of Review	234
	Introduction	234
	Evolution of Fiduciary Duty Case Law and Judicial Review	240
	Standards: Historical Perspective	240
	Some Practical Considerations	254
	Securities Laws and Public Company Acquisitions	257
	Disclosure of Merger Negotiations	257
	SEC’s Proxy and Tender Offer Rules	259
	Regulation M-A	262
	Miscellaneous	263
	Anti-Takeover Devices	267
	Staggered Boards and Other Structural Changes	268
	Poison Pills	272
	Appendix	276
	Chapter 7: Leveraged Buyouts (Structural and Tax Issues) and Acquisitions of a Troubled Business (Creditors' Rights and Bankruptcy)	277
	Leveraged Buyouts: Structural and Tax Issues	277
	Introduction	277
	LBO Structures and Their Tax Consequences	279
	Acquisition of a Troubled Business Generally	283
	Fraudulent Transfers	285
	Acquisitions Out of Bankruptcy	292
	Overview	292
	Purchasing of Assets out of Bankruptcy	293
	Chapter 8: International M&A	302
	Cross-Border Acquisitions	302
	Inbound Acquisitions	302
	Outbound Acquisitions	307
	Extraterritorial Application of U.S. Laws	310
	Chapter 9: Joint Ventures	312
	Reasons for Joint Ventures	312
	Types of Joint Ventures	313
	Entity JVs	313
	Contractual JVs	313
	Typical Joint Venture Terms	315
	Scope/Business Plan	315
	Capitalization/Contributions	316
	Due Diligence	316
	Management/Voting	316
	Exclusivity/Noncompetition	318
	Intellectual Property	319
	Reversion of IP Rights	320
	Distributions	321
	Financial Reporting	321
	Exit—Restrictions on Transfer	321
	Termination/Dissolution	323
	Other Considerations	323
	Appendix	324
	About the Website	325
	Index	327
	EULA	335