Compliance, EBITDA and Specific Risk - Business Valuation Zone

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Compliance

EBITDA

Specific Risk

MAEjor Ruling: Delaware Court of Chancery Finds Target Suffers Material Adverse Effect and Acquirer Could Back Out of Transaction

Cooley M&A

OCTOBER 29, 2018

In reaching these holdings, the court found that: the target’s business experienced a “dramatic, unexpected and company-specific downturn” shortly after signing due in part to “serious and pervasive data integrity problems” that adversely impacted the target’s regulatory compliance.

Compliance

Compliance EBITDA Specific Risk Marketability

Material Adverse Effect Clauses

Erik A. Lopez

SEPTEMBER 23, 2015

First, it qualifies ( i.e. , limits) various seller representations, warranties and covenants , establishing a relatively high threshold for disclosure or compliance relating to risks associated with changes in the target’s business. MAE serves two primary functions in a transaction agreement.

Net Debt

Net Debt EBIT Marketability Specific Risk

MAEjor Ruling: Delaware Court of Chancery Finds Target Suffers Material Adverse Effect and Acquirer Could Back Out of Transaction

Material Adverse Effect Clauses

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