Corporate deals and transactions
Given the potential business disruption initiated by the COVID-19 Coronavirus there are a number of considerations for M&A transactions:
Sellers may be worried about:
- hitting financial targets on earn-out deals and/or
- buyers not being able to pay earned earn-outs payments
Buyers considering their own solvency/cashflow in terms of earn out payments due over the short to medium term.
Regarding deal structures and pricing there may be material adverse change clauses and specific COVID 19 warranties/indemnities to consider.
People may want to consider:
- Down round, dilution and compensation issues
- Aspects of valuation
- Bridge (loan note) financing
Also, with regard to existing financing, you should review compliance with financial and other covenants in facility agreements and consider the impact of any event of default under financing arrangements.
Insolvency issues for directors09 December 2020
All directors owe duties to their companies. When a company is solvent, those duties are paramount but once insolvency is pending, directors must act in the creditors best interests. That difference means that the nature of the directors’ duties undergoes a significant shift when insolvency threatens.
HMRC puts its stamp on social distancing16 April 2020
With vast numbers of people now working remotely due to COVID-19 restrictions, HMRC have put in place an electronic process for the payment of stamp duty and stamping of share transfer documents.
Reviewing your existing financing arrangements in light of COVID-19: FAQs26 March 2020
Many of our clients are concerned about the effect of the current economic climate on the financial health of their businesses. We recommend that companies should consider reviewing their existing financing documents to identify any risks of potential defaults occurring and to decide how best to proceed. We have put together the following guide to help answer the most frequently asked questions we receive on this topic.
Effect of Coronavirus on financial reporting18 March 2020
The Financial Reporting Council (FRC) has published fresh guidance on issues arising from the Covid-19 pandemic.
Budget 2020 - New Kid on the Block12 March 2020
There was a sombre mood to the Budget initially, focusing as it did on measures to help deal with the coronavirus / Covid-19. Clearly the financial outlook is expected to be challenging, and our new Chancellor, Rishi Sunak, made sure to point out that the Office for Budget Responsibility forecasts have not (yet) taken the impact of Covid-19 into account.