The American Bar Association’s (ABA) Business Law Section has released its 2021 Private Target Deal Points Study (the “Study”), the flagship product of the Market Trends Subcommittee of the Mergers and Acquisitions Committee. This publication is widely recognized as the gold standard for market metrics of key negotiated legal issues in acquisitions of U.S. private companies. K&L Gates partner Jessica Pearlman is Chair of the Study (a role she has held for over twelve years), leading the effort of the over 50-member working group including K&L Gates partners Andrew Lloyd, Shoshanna Katz, and Remsen Kinne.
The Study is the preeminent study of M&A transactions, utilized internationally by practitioners, investment bankers, corporate development teams, and other advisors. It examines the prevalence of specified provisions in 123 publicly-available private target M&A transactions from 2020 and the first quarter of 2021 with a purchase price between US$30 million and US$750 million.
Although the 123 deals in the 2021 Study reflect a broad swath of industries, technology and health care together made up nearly one-third of the deals. The Study shows a dramatic increase in references to the use of representations and warranties insurance (now in almost two-thirds of the deals). New this year to the Study is a unique look at data on termination fees in the private target context, as well as data on provisions relating to COVID-19, including how an exception to the ordinary course covenant for responses to the pandemic grew over time.
The 2021 Private Target Deal Points Study is available for download by M&A Committee members from the Market Trends Subcommittee’s page on the ABA’s website. More information about the study is available by contacting Jessica Pearlman.