Mergers and Acquisitions from A to Z

Contents

ACKNOWLEDGMENTS ix
INTRODUCTION TO THE THIRD EDI T ION xi

CHAPTER 1
The Basics of Mergers and Acquisitions 1
Understanding Key Terms 1
What's All the Fuss About? 3
Why Bad Deals Happen to Good People 8
Why Do Buyers Buy, and Why Do Sellers Sell? 9

CHAPTER 2
Preparing for the Dance: The Seller's Perspective 13
Conducting a Thorough EOTB Analysis 17
Preparing for the Sale of the Company 17
Common Preparation Mistakes 29
Other Considerations for the Seller 31

CHAPTER 3
Initiating the Deal: The Buyer's Perspective 34
Assembling the Team 34
Developing an Acquisition Plan 35
Applying the Criteria: How to Narrow the Field 43
Approaching a Company That Is Not for Sale 44
Dealing with the Seller's Management Team 45
Directory of M&A Resources for Prospective Buyers (and Sellers) 46

CHAPTER 4
The Letter of Intent and Other Preliminary Matters 51
Proposed Terms 52
Binding Terms 52
Common Reasons Why Deals Die at an Early Stage 59
Preparation of the Work Schedule 60
Another Predeal Task: The Growing Debate About the Role and
Usefulness of Fairness Opinions 61

CHAPTER 5
Due Diligence 65
Best Practices in Due Diligence in the Era of Accountability 2.0 66
Legal Due Diligence 74
Business and Strategic Due Diligence 83
Conclusion 91
Appendix to Chapter 5: Post-Sarbanes-Oxley Due Diligence
Checklist 92
The Disclosure Requirements 93
Checklist of Items Post-Sarbox 97

CHAPTER 6
An Overview of Regulatory Considerations 101
Introduction 101
Environmental Laws 102
Federal Securities Laws 103
Federal Antitrust Laws 106
Waiting Periods 109
Labor and Employment Law 113

CHAPTER 7
Structuring the Deal 120
Stock vs. Asset Purchases 122
Tax and Accounting Issues Affecting the Structure of the
Transaction 126
One-Step vs. Staged Transactions 130
Method of Payment 132
Nontraditional Structures and Strategies 135

CHAPTER 8
Valuation and Pricing of the

Sherman, Andrew

ANDREW J. SHERMAN is a partner in the Washington, D.C., office of Jones Day and an internationally recognized authority on the legal and strategic issues of emerging and established companies. A top-rated adjunct professor in the MBA and Executive MBA programs at the University of Maryland and Georgetown University Law School, he is the author of Harvesting Intangible Assets, Franchising and Licensing, and Mergers Acquisitions from A to Z .