Event: The accounting aspects of acquisition agreements

Practical Law Company in association with MacIntyre Hudson

Course Outline

Throughout the course Practical Law Company precedents will be used as specimen documents, together with a series of case studies, to illustrate how the drafting impacts on the "interpretation" of the accounting clauses:

  • Overview and introduction: The purpose of the accounting clauses: risk management, accounts warranties (and the link to financial due diligence), consideration and price adjustment clauses (and the link to warranties), production of completion accounts, locked boxes and earn-outs.
  • Accounts warranties: Drafting general statutory accounts warranties, drafting more specific asset and liability warranties (including post performance warranties) – how to decide what to include and what to concede on and how to focus them, management accounts and accounting records warranties, an analysis and implications of the decision in Macquarie Internationale Investments Ltd and Glencore UK Limited and practical tips on how to get the most out of the warranties.
  • Price adjustments and Completion Accounts: A purchaser "friendly" approach with explanation of common price adjustment mechanisms and targets including Net Assets, Working Capital, and a Debt Free Cash Free deal basis with a Net Debt adjustment concentrating on definitions and structuring the elements to avoid unintended consequences. Putting together Completion Accounts instructions and identifying questions that need to be asked of the advising accountants and your client.
  • Locked Boxes: The reasons for a locked box, focusing on both seller and buyer points, the business risk associated with the "Agreed Accounts" and the issue of leakages.
  • Earn Outs: Commercial reasons for choosing an earn-out; the risks (especially with continued seller involvement), accounting issues and possible definitions of earnings; and what should be considered for inclusion in the agreement.

Learning Outcomes

As a result of this session participants will:

  • Be more confident in drafting the accounting clauses in acquisition agreements;
  • Know when to seek clarification from your clients and advising accountants and which questions to ask;
  • Be better prepared to manage the "accounting" risk inherent in the accounting clauses.

Who Should Attend:

  • Lawyers involved with acquisitions.

Ideally delegates attending will be familiar with the fundamentals of financial statements to obtain maximum benefit from this course. Detailed UK GAAP or IFRS knowledge is not necessary.

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Details

Time:

  • 9.30am: Registration
  • 10.00am - 5.00pm: Course

Date:
Tuesday 16th October 2012

Price:
Complete the registration form before 10th September to receive our Early Bird Offer;

  • Subscribers: £275 + VAT
  • Non-Subscribers: £325 + VAT

Standard price:

  • Subscribers: £350 + VAT
  • Non-Subscribers: £400 + VAT

CPD:
6 CPD Points

Location:
Maclntyre Hudson Advisory Services LLP
New Bridge Street House
30 - 34 New Bridge Street
London EC4V 6BJ

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