Sale & Purchase Agreements

Our trainer is a consultant, public speaker and author with expertise in private equity, debt advisory, restructuring and infrastructure. He is a Senior Advisor to KPMG Finland, a Senior Advisor to Reorg EMEA Covenants, the leading provider of information to the European High Yield community, and a Senior Consultant to Grant Thornton UK.

Training programmes are provided to a wide range of blue-chip clients in Europe, Africa, the Middle and Far East, North America and Australasia. In-house clients include banks (BNP Paribas, Société Générale, ING, Barclays Capital, Bank of China, RBS, SEB); lawyers (Baker & McKenzie, Skadden Arps, Sullivan & Cromwell, Cadwalader, Latham & Watkins, Weil, White & Case); advisory firms (Lazard, PWC, M&A International, KPMG, EY, Deloitte); PE firms (Cinven, Advent, Barings Asia, Waterland); corporates (Siemens, Airbus, Turkcell, Candy Crush, Gunvor, Statkraft) and governmental bodies (the UKLA, the EBRD, the ECGD, Omani Oil Corp.)

He qualified in South Africa both as a Chartered Accountant, with Deloitte and as a lawyer with Hofmeyr where he was involved in structuring several high-profile project financings including BMW 3 Series, Ford Sierra, GM, Sappi and Mondi.

When he moved to London and joined Lazard Brothers as a corporate finance executive he was involved in a wide range of public and private transactions. Subsequently, he joined Hoare Govett as an assistant director where he acted as an advisor to smaller listed companies and was involved in several syndicated Euro-Equity Initial Public Offerings.

In 1991 he joined ABN Amro’s cross-border M&A team before being transferred to MeesPierson Corporate Finance as a Director in Cross-Border M&A where he was also involved in a number of deals in Central Europe. During this time, he was a member of the EU-PHARE programme and advised the Estonian government on its privatisation programme.

He is the Programme Director at the City Business School, London, for Infrastructure Finance for the M. Sc. programme in Business Administration and Finance.

He is a member of the Institute of Chartered Accountants in England & Wales and the South African Institute of Chartered Accountants. He completed a BA and an LLB at the University of Natal and a B. Compt. (Hons) at UNISA.

• SPA structure & layout– the globalisation of sale and purchase agreement (SPA) in M&A has led to a formulaic approach to the main headings in SPAs across Europe and parts of Asia Pacific. This sale purchase agreements course includes an appendix setting out the main clause headings in the European and UK sale and purchase agreement (SPA) structures.
• Interpretation of contracts – there is a significant difference in approach between English law and civil systems. The contract purchase agreement programme highlights these and their possible commercial effects.
• Understanding & documenting the Equity Bridge (reconciling Enterprise to Equity Value) - the ‘Cash free / Debt free‘ concept seems simple enough but the devil is in the detail. The equity bridge M&A programme discusses the nuances of ‘debt’ and ‘surplus cash’ and guides you on how to define these concepts to avoid disputes pre-closing and post-closing.
• The working capital adjustment– identifying working capital (and the PEG) is often even more contentious than ‘debt/cash’ as there is no standard definition and it is up to the parties to agree on its components. The programme provides guidance on how to approach and document working capital in the SPA.
• Completion Accounts– there is no standard accounting definition on what constitutes ‘Completion Accounts’; the programme identifies how to ensure the SPA should approach this issue and also the potential pitfalls in using Completion Accounts.
• Locked Box– has become widely used in Europe (& some parts of Asia Pacific) but entails greater risk for buyers and sellers but there remains a gap between theory and practice so far as the value accrual is structured. The locked box clause programme identifies the main risks and how these can be mitigated in the SPA particularly so far as the value accrual is concerned.
• Representations, Warranties, Disclosure and Warranty Insurance– these three aspects need to be considered together particularly since, in English law, the remedies for misrepresentations are more punitive than those for warranties unless care is taken in drafting. The course provides tips on how to avoid falling into this trap. Warranties are a contentious area and the programme covers the main areas warranted (including ESG), managing counterparty risk with multiple sellers and ‘shell’ sellers, inter-action with disclosures and the appropriate disclosure ‘standard’ to qualify the warranties. Last, damages under warranty claims are calculated differently in English law vs. civil law. The increasing role of warranty insurance is also covered.
• Limitations on Seller’s liability– this is equally contentious since it impacts the warranties, indemnities and the tax covenant. The programme considers these issues from both buyer and seller-friendly positions, especially the debatable areas of exceptions based on the seller’s ‘awareness’ and the buyer’s own ‘knowledge’ (sandbagging and anti-sandbagging in M&A). The course also reviews the various financial caps and the ‘market’ standards that have evolved in Europe.
• Earn-outs – the course provides practical guidance on how to devise appropriate benchmarks, milestone payments and ways of mitigating the risks of meeting benchmarks. It also identifies the pitfalls (for buyers and sellers) which help mitigate disputes.
• Split Exchange & Completion – the course discusses the thorny issues that arise when completion is delayed and provides guidance on how to manage a buyer’s desire for updated warranties in the commercial purchase agreement and how sellers should respond.

• Our trainer qualified as a solicitor so has experience in drafting legal sales agreement documentation.
• Having trained as a Chartered Accountant with Deloitte he has a sound understanding of the key financial issues in the UK and European sale and purchase agreements (SPAs).
• He has experience in over 40 years of M&A covering a wide range of regions including the UK, Europe, the US, Asia and Africa.
• The trainer is still active in the M&A market through his various consultancies.
• He has been involved in over 20 earn-outs.
• Through presenting to clients involved in different aspects of M&A (advisers, transaction services/DD, Investment Banks and lawyers) he gains exposure to different aspects of the SPAs (sale and purchase agreements).

This sale and purchase agreement course is a ‘must know’ for professionals involved directly in documenting private M&A in the SPA agreement, including:

• commercial lawyers
• in-house M&A lawyers
• corporate finance advisors requiring insight into the legal sales agreement issues
• Private Equity practitioners
• owner/managers
• providers of warranty insurance
• Lawyers in banking (who may need to review the SPA in M&A).

And a ‘nice to know’ for:

• The skeleton structure of the SPA Agreement: Overview
• corporate finance advisors
• accountants providing due diligence/VDD (Vendor due diligence)
• private wealth advisors involved in M&A
• lenders/providers of debt finance for acquisitions
• professionals in strategy or business development
• professionals providing support services to SPA agreements in M&A
• fund of fund professionals
• marketing teams
• HR/People management
• directors on corporate boards (not in SPA in M&A)
• practitioners involved in ESG (Environmental, social, and governance)

Sale and Purchase agreements lie at the heart of any private acquisition. This course focuses on the key areas of the SPA. In Completion Accounts, the standard definitions of cash, debt and working capital adopt a very broad-brush approach paving the way for disputes post-completion. Where a Locked Box is used, the parties face different issues; particularly the definitions of leakage and the how-to draft sale and purchase agreements a value accrual (of cash or profits which is increasingly used).

Warranty claims present another area of potential difficulty, particularly how and when the measure of damages is calculated and the market is considering ways to enhance the buyer’s recovery for damages. In the UK, Infiniteland Case Review has broken new ground in terms of the disclosure standard and what constitutes the buyer’s ‘knowledge’. The course also considers the areas where civil law differs in its approach; for example, the interpretation and the approach to damages for warranties in share purchase agreements and the approach to disclosure.

Split Exchange and Completion is another potentially controversial area regarding which warranties need repeating and how that dovetails with disclosure and the MAC.

Reference is made during the course to recent or relevant leading Case Reviews.

Please note that this course covers material that is also covered in our Advanced Negotiation Issues in M&A course.