October, 2017

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The Art of Drafting Milestones for an Earn-Out

Cooley M&A

Former stockholders of SARcode Bioscience were recently denied a claim that they were entitled to be paid $425 million in milestone payments under a merger agreement. The decision provides an anecdotal lesson in drafting milestones and suggests that the more technically prescribed milestones may be more difficult to meet, even though the development of the drug is ultimately successful.

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4 Ways a Business Valuation Will Change Your Company

RC & Co.

Business valuations are an important process for all business owners. In addition to providing a clear picture of current market value, you can also assess competitors, revenue, and assets during the business valuation process. Executing a proper business valuation isn’t something that can be done on a whim. In fact, the best valuations are the ones conducted by an independent, third-party CPA firm.

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4 Common Worries About Selling a Business

Sun M&A

Selling a business can feel complicated and overwhelming. It’s normal to have some concerns when you begin. No deal is a certainty, but working with an expert in the industry who is deeply knowledgeable about the business sales process can increase the odds of a successful closing. Here are some of the most common concerns sellers express, and how a skilled advisor can address them.

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Appraisal as “Nontraditional Activism”

Appraisal Rights

Seekingalpha has published this piece, “ Appraisal Rights: Nontraditional Shareholder Activism” by Aberdeen Asset Management. In this post, Aberdeen recounts the increase in appraisal in this decade , and focuses on how investors have sought to realize additional returns in the appraisal process. Aberdeen then highlights the risks, including legislative risks (which we have covered before ) in noting that appraisal is “as much of a legal strategy as it is an investment strategy” and in noting

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How to Leverage Intent Data for Better Outcomes

Speaker: Susan Spencer, Principal of Spencer Communications

Intent signal data can go a long way toward shortening sales cycles and closing more deals. The challenge is deciding which is the best type of intent data to help your company meet its sales and marketing goals. In this webinar, Susan Spencer, fractional CMO and principal of Spencer Communications, will unpack the differences between contact-level and company-level intent signals.

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How M&A Advisors Add Value for Sellers

Sun M&A

Selling a business can be expensive and overwhelming , so owners often balk at the prospect of driving up costs by working with an M&A Advisor. Owners who do, however, almost universally believe their banker added value. The Value of Middle Market Investment Bankers, a study authored by Fairfield University Dolan School of Business’s Michael McDonald, asked 85 business sellers about their experiences working with M&A Advisors.

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Using Your Strengths When Selling Your Business

Sun M&A

The term “independent business owner” doesn’t just refer to your life as an entrepreneur. It also denotes the mindset that life as a business owner demands. You’re confident, independent, and maybe a bit stubborn. These vital traits have helped your business thrive, but can work against you when you’re ready to sell. Why is that? After all, you’re already an expert in sales.

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Expertise Improves Close Rates

Sun M&A

You’ve been considering selling your business for some time when you get that interesting email in your inbox: “Dear Business owner: I, Mr. Private Equity Principal/Mr. Strategic Corporate Development Professional have an interest in acquiring your business because we believe your product/services would synergistically enhance our current operations.

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Questions Acquirers Always Ask

Sun M&A

When pursuing the sale of your company, it is important to be prepared. Being prepared not only means getting your books and records organized and preparing a quality descriptive executive summary of your company, it also involves educating yourself to properly address the common questions that will inevitably be asked by prospective acquirers. Properly preparing for and addressing these questions will maximize an acquirer’s comfort level, reduce their perceived risk and increase valuation.

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Delaware Supreme Court 3-Judge Panel Hears Appeal in ISN Software Appraisal

Appraisal Rights

As reported in Law360 [$$], on October 11, 2017 the Delaware Supreme Court heard argument appealing the Chancery Court’s ruling in the ISN Software appraisal case. We have previously posted on the trial court’s decision here , in which Vice Chancellor Glasscock awarded a premium to the merger price. The Supreme Court did not rule and did not indicate when it would do so.

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The High Cost of Fewer Appraisal Claims, Revisited

Appraisal Rights

Lexology’s Federal Securities Law Blog has this analysis of the recent article we posted about , the High Cost of Fewer Appraisal Claims. The author, from Porter Wright in Ohio , notes that the recent data on appraisal claims dispel certain arguments made by the anti-appraisal crowd. In particular, he writes, “Prior to the 2016 amendments, many proponents of limiting appraisal rights argued that shareholders who invoke their appraisal rights negatively affect non-dissenting shareholders; their

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Statement of Cash Flows vs. Cash Flow Statement

Speaker: Wayne Spivak - President and Chief Financial Officer of SBA * Consulting LTD, Industry Writer, and Public Speaker

The old adages that "cash is king" and "you can’t spend profits" still hold true today. But however well-known these sayings might be, it requires a change in mindset to properly implement a cash flow management system that predicts your business's runaway as accurately as possible. Key to this new mindset is understanding the difference between the Statement of Cash Flows, a historical look at the source and uses of cash, and the Cash Flow Statement, which uses transaction history and forward-l

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M&A Guide to CFIUS: How the Review Process Can Impact Your Transaction

Cooley M&A

Article 1 of 4. The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) has received much attention over the past several months for its role in blocking two separate Chinese acquisitions of US semiconductor companies. In September 2017, President Trump issued an Executive Order prohibiting Canyon Bridge Capital Partners, an investment firm with ties to the Chinese government, from acquiring Lattice Semiconductor Corporation (Lattice).

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