Structuring Carve-Out Transactions: Key Deal, Environmental, Intellectual Property, and Other Considerations

Allocating Assets and Liabilities, Due Diligence, Reps, and Warranties, Consents

Note: CPE credit is not offered on this program

A live 90-minute premium CLE webinar with interactive Q&A


Thursday, June 6, 2019

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, May 10, 2019

or call 1-800-926-7926

This CLE webinar will examine the key considerations in structuring carve-out transactions. Our panel's discussion will include best practices for determining and segregating carve-out assets and liabilities, timing and pricing issues, environmental and intellectual property concerns, transition services agreements, reps and warranties, and consent issues.

Description

Acquisitions of carve-outs tend to be more complicated than acquisitions of stand-alone businesses. The seller must delineate what parts of its business are being sold and where those assets are located. Timing may be accelerated when the transaction is a competitive auction. Potential buyers may be expected to conduct due diligence and complete a carve-out transaction on an expedited basis.

Counsel should conduct an in-depth tax analysis to determine viability and preferred transaction structure. The sale will likely be structured as a dropdown of selective assets and liabilities of the parent into a new subsidiary and the sale of the stock of the new subsidiary to the buyer, or as a direct sale of selective assets and the assumption of certain liabilities by a new subsidiary of the buyer (formed to provide insulation from potential unknown contingent liabilities).

Counsel for both purchaser and seller must understand the assets, contractual rights and liabilities to include in the transaction. The seller will need to prepare stand-alone financials for the carve-out entity. Representations and warranties will focus on acquired assets and assumed liabilities, including reps regarding financial information, sufficiency, and condition of acquired assets, as well as employment terms and benefits. Careful consideration will need to be given to address environmental issues in the carved out business and to ensure intellectual property rights used in the purchased business are properly transferred or maintained.

Various services will likely need to be shared by the seller to the buyer for some period after closing. Identifying the nature of the shared services and the terms of the transitional relationship (the type of services, performance standard, time, cost, etc.) will need to be negotiated and documented in a transition services agreement.

Listen as our authoritative panel examines carve-out transactions from the perspective of both the buyer and seller. The panel will discuss planning, structuring, due diligence, and transition services concerns, as well as critical documents in a carve-out transaction.

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Outline

  1. Carve-out: sale of business or division
  2. Preparing for sale
  3. The scope of due diligence
  4. Allocation of assets and liabilities
  5. Transition services
  6. Key transaction documents

Benefits

The panel will review these and other essential questions:

  • What factors might make a carve-out transaction more complex than the outright sale of a company?
  • What steps should a seller take before proceeding with a carve-out transaction?
  • What factors should a purchaser consider in scoping and evaluating the assets and liabilities of the target?
  • What are the key ancillary agreements?

Faculty

Cohen, Abbi
Abbi L. Cohen

Partner
Dechert

Ms. Cohen, recognized as a leading environmental lawyer by Chambers USA for more than a decade, focuses her practice on...  |  Read More

Kokolus, Violetta
Violetta A. Kokolus

Partner
Dechert

Ms. Kokolus advises on complex technology and intellectual property transactions. Her practice focuses on intellectual...  |  Read More

Pratt, Stephen
Stephen R. Pratt

Partner
Dechert

Mr. Pratt focuses his practice on mergers and acquisitions, with an emphasis on private equity and public company...  |  Read More

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