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LPC Law Notes Private Acquisitions Notes

Completion Notes

Updated Completion Notes

Private Acquisitions Notes

Private Acquisitions

Approximately 339 pages

A collection of the best Mergers and Acquisitions* notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".

In short, these are what we believe to be the strongest set of Mergers and Acquisitions notes available in the UK this year. This collection is f...

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The following is a more accessible plain text extract of the PDF sample above, taken from our Private Acquisitions Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Completion

Parties: N1/Investment vehicle, N2/B, M, PEF, S, T, Bank

Key players in MBO

  1. PEF and their lawyers

  2. Bank and their lawyers

  3. M and their lawyers

  4. accountants

  5. S and their solicitor

Key player concerns

  1. information re T, risk on MBO, share transfer provisions, good leaver/bad leaver, drag along/tag along [see below]

  2. priority for debt

  3. share structure/ratchets, IRR etc, service contracts, exposure in relation to Ws

Parties

 see structure diagram

Fundamental issues

  • how the eq investment in N1 will be structured between PEF and M

  • rights associated w/different classes of N1 shares

  • how N1 will be managed post compl

  • M’s terms of employment

  • acq terms of T by N2 from S

  • extent of contractual protection/info given by M to PEF

  • Bank terms for any debt finance

Key Documents [draw up SGS 12 structure diagram w/key docs included]

Investment/Subscription/Equity Agreement

  • similar to S’ers Ag

  • parties will be: PEF, M, N1

  • seeks to establish:

  • what M can and cannot do w/o consent of PEF. PEF consent usually required for: issue of shares, changes to N1 arts or any of its subs (inc N2), change in nature of business and entry into, or termination, of material contracts

  • how ratchet provisions work (if any)

  • W given by M to F. These are not w/standing that PEF will have carried out extremely thorough DD on T. This is because much of info in DD exercise is based upon that provided by M to PEF (on MBO). These W provided PEF w/contractual action against M (although v.rare) and include: Ws re r’ableness of business plan prepared by M, accuracy of financial info used to construct business plan (cf. s.393 CA), accuracy of info given to lawyers and accountants preparing DD reports. Ws will be disclosed against by M in DL which accompanies IA.

Acq Document

  • docs from a standard share or business purchase same for acq of T on MBO

  • parties: N2, T and disc letter

Arts of N1

  • in addition to standard arts, you would also see:

  • dividend entitlements

  • rights of s’ers on return of capital

  • pre-emption rights on transfer of shares

  • good leaver/bad leaver cl’s

  • drag along/tag along cl’s

  • any ratchet cl’s

Service Ags

  • whilst M will often currently be employed by R, they will also become e’ees of N1 and will need to enter into new service contracts

  • key issues:

  • res covs

  • notice provisions (including PILON cl)

  • gardening leave, and

  • remuneration (possibly including discretionary/contractual performance related bonus schemes)

Finance/Debt docs, banking docs

  • parties for Loan ag - Bank and N2

  • parties for sec docs and guarantees: Bank, N1 and 2, T

  • intragroup loan ag: N1 and 2

  • Bank is likely to provide a large loan to N2 to help purchase T shares or business

  • Bank will want security over assets of N2, N1, T and any subs

  • following docs will need to put in place”

  • facility ag - setting out total amount being advance to N2 w/default provisons and covs (including requirements that N2 provide info to Bank @ agreed times and requirements that N2 meet certain tests thr/o duration of facility)

  • Security docs: N2 will give a debenture in favour of Bank to secure borrowings. N1, T and any T subs likely to have to give a guarantee and debenture in favour of the Bank also to secure N2’s loan. Pre-Oct 2008, this required whitewashing under old CA to allow giving of security for such financial assistance purposes

Completion Process, in particular Board Minutes

s.323 CA

  • appointing corp representative via BR - allows Co A (ie. N1) who is a s’er of Co B (ie. N2) to authorise a person (often a Co A d’or) to act as its representative s’er @ Co B meetings

  • only relevant for corporate s’ers - list BR in BMs if made

Execution

  • Contract for co’s: 2 x d’ors or 1 d’or on behalf of co

  • Deeds for co’s: 2 x authorised sigs (aka d’or or company sec) or 1 x d’or and witness

  • Contract for individuals: individual

  • Deed for individual: individual and witness

  • Contract for LPs: general partner or d’or/other GP authorised signatory

  • Deed for LPs: GP and witness or d’or/other GP authorise signatory and witness

Present

 - check for quorum issues - remember 2 d’ors under CA 2006. Watch out for if d’ors are resigning halfway thr/the BMs, are there still enough to be quorate?

Docs

  • make sure you are clear re which are being signed depending on which board it is

Written res’s

  • remember voting method - it isn’t on a show of hands on those present so the actual threshold in % needs to be met.

  • Nb. on fact patterns if people are away/d’ors on holiday

Deeds and contacts - Power of Attorney

  • If any d’ors are away they need to appoint a power of attorney because deeds and contracts need all parties to sign them

  • POA needs to be drafted really narrowly though to only include the signing of deed and contract and in time scope

  • POA should be executed by deed

Relevant forms for assignment

  • separate deeds of Assignment (eg. IP rights, contracts)

  • TR1 for any properties

  • Stock Transfer Forms for any shares

Main docs needed for equity transaction on MBO

  • IA

  • DL

  • Acq Agreement

  • Service contracts (as M are buying equity from N1)

Main docs needed for financing

  • Loan Ag

  • debenture

  • Intra-group Loan Ag

  • Cross-guarantees

Main docs needed for acquisition

  • Acq Ag

  • together w/DL (for acq ag (from S to B)

  • ancillary acq docs

Post-Completion

Following post-compl matters should be carried out by B’s solicitors following acq:

Tax

  • Stamp duty in respect of any shares w/in 30 day deadline @ rate of 0.5% of cons apportioned to them. As this is a business sale, total cons will have to be apportioned between different assets being sold

  • SDLT - complete a Land Transaction Return form and pay SDLT for any properties transferred w/in 30 days. If a...

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