1
Type
Speaker
CPD Hours Level
Masterclass 3 IntermediateInformation
SRA Competency B D

Introduction

With high values at stake, difficulties in reaching agreement on the completion mechanism and sale and purchase agreements (SPAs) can often frustrate and sometimes derail an otherwise successful transaction.

Without definitive rules or standards on completion mechanisms, parties to a transaction often cite ‘market practice’ when negotiating how the initial offer price is converted into the final equity value paid for a business.

This course aims to provide lawyers with an understanding of the key accounting issues to be covered in business and share purchase documentation.

What You Will Learn

The key issues covered by this course will include:

Enterprise Value v Equity Price

  • Bridging between headline price and price paid/received on deals
  • What does ‘cash free, debt free, and a normal level of working capital’ really mean?
  • Interpreting ‘cash’, ‘debt’ and ‘working capital’ from a buyer v seller’s perspective
  • How accountants establish ‘normal working capital’
  • Factors to consider for off-market deals v multi-party processes (for sellers and buyers)

Completion Accounts

  • The accounting hierarchy:
    • Specific accounting policies - how to draft meaningful specific accounting policies
    • Consistency - with what?
    • Defining GAAP and the risk of relying only on GAAP
  • Tips regarding the mechanisms and strategies for the preparation and agreement of completion accounts
    • Dispute resolution considerations
    • Timing considerations
    • Practicalities of who prepares and who reviews

‘Locked Box’ Deals

  • How locked box deals differ from conventional price adjustment deals
  • The nature of locked box accounts compared with annual accounts or completion accounts
  • ‘Leakage’ and ‘permitted leakage’
  • The value accrual ‘ticker’

Accounting Warranties

  • Purpose and content
  • Differences between management accounts warranties and statutory accounts warranties
  • Post accounts date events: material adverse change warranties
  • Locked box considerations

Earn-Outs

  • Picking a measurement basis
  • Pitfalls of relying on ‘EBITDA’ or ‘profit’
  • Treatment of non-recurring items
  • Post-completion acquisitions
  • Continued involvement of sellers
  • Synergies: ensure comparing ‘apples with apples’ in mechanics of earn-out

Disputes

  • Most common areas of dispute
  • Strategies to avoid disputes pre-deal
  • Dispute resolution post-deal

Top Tips to Protect Client Value

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Masterclass | 17.01.2020

London | 2:00pm - 5:15pm


Acquisition Agreements - The Key Accounting Essentials for Lawyers

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17
2020
London
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Masterclass | 24.02.2020

Leeds | 2:00pm - 5:15pm


Acquisition Agreements - The Key Accounting Essentials for Lawyers

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Feb
24
2020
Leeds
2:00pm - 5:15pm
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Masterclass | 12.03.2020

Bristol | 2:00pm - 5:15pm


Acquisition Agreements - The Key Accounting Essentials for Lawyers

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Mar
12
2020
Bristol
2:00pm - 5:15pm
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Masterclass | 16.03.2020

Birmingham | 2:00pm - 5:15pm


Acquisition Agreements - The Key Accounting Essentials for Lawyers

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Mar
16
2020
Birmingham
2:00pm - 5:15pm
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Masterclass | 22.04.2020

Manchester | 2:00pm - 5:15pm


Acquisition Agreements - The Key Accounting Essentials for Lawyers

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Apr
22
2020
Manchester
2:00pm - 5:15pm
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Prices (ex VAT)
Smart
Plan Information
£125
Season
Ticket Information
£187.5
Standard
£250
Group bookings
Discounts are available for multiple places and if you have 5 or more people interested in this course and would like to discuss holding it in your area or on an in-house basis then please email us at information@mblseminars.com
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