M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Tuesday, April 30, 2013

SRS 2013 claims study

Shareholder Representative Services has just released a new report, its 2013 M&A Post-Closing Claims Study.  The report is based on a review of claim activity in 420 private company transactions over the past year. Two thirds of deals had post-closing issues to report.  Some of the study's key findings:

  • Earn-out milestones for tech and other deals outside of life sciences were achieved 50% of the time
  • 18% of deals had at least one claim made in the final week of the escrow period.
  • Final escrow releases were delayed due to claims in 30% of deals.
  • 73% of deals with post-closing purchase price adjustment mechanisms saw adjustments, which were more often buyer-favorable than seller-favorable. 27% of adjustments were ultimately modified from the initial amount claimed.
  • 10% of earn-out milestones that were initially claimed as missed eventually resulted in a payout for shareholders.
  • Tax claims became more frequent due to the average target being a more mature taxpayer. In addition, state and local governments have become more aggressive about revenue collection, especially for sales and use taxes.

Give it a download. 

-bjmq

http://lawprofessors.typepad.com/mergers/2013/04/srs-2013-claims-study.html

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