Corporate deals and transactions
The effect of the coronavirus pandemic has been felt globally, and businesses have experienced a variety of unique challenges during the pandemic. In the UK, although the lifting of restrictions and “freedom day” on July 19th 2021 provide reason for optimism, the impact of the pandemic and more than a year of restrictions still raise 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.
Corporate finance
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.
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