From emerging regulation to deal mechanics, we write about the questions founders and investors actually ask — practical analysis you can put to work.
Warranty and Indemnity (W&I) Insurance (in the U.S. called “Representation and Warranty Insurance” or “R&W Insurance”) is a commercial insurance product that covers losses arising from breaches of representations and warranties (and certain indemnification claims) in M&A transactions.
A reverse triangular merger is an M&A structure where the buyer creates a wholly-owned acquisition subsidiary (“Merger Sub”), which then merges into the target company, with the target surviving as a wholly-owned subsidiary of the buyer.
A convertible bond is a debt security that pays interest like a regular bond but gives the holder the right to convert the bond into a predetermined number of shares of the issuer at a future date.
A warrant is a financial instrument giving the holder the right (but not obligation) to purchase a specific number of the issuer’s shares at a fixed price (exercise price) within a defined period (typically 5-10 years).
An Ultimate Beneficial Owner (UBO) is the natural person who ultimately owns, controls, or benefits from a legal entity — whether through direct ownership, ownership through intermediate corporate or trust structures, or de facto control.
A Subscription Agreement is a contract under which an investor commits to purchase newly issued securities directly from the issuing company.
Conditions Precedent (CPs), also called Closing Conditions, are specific events or circumstances that must occur (or specific facts that must be true) before a party is obligated to consummate a transaction.
The locked box is a fixed-purchase-price M&A pricing mechanism that fixes equity value as of a defined historical balance-sheet date (the “locked box date”) prior to signing — eliminating post-closing purchase-price adjustments and the operational complexity of working-capital true-ups.
Tax due diligence (Tax DD) is the systematic review of a target company’s historical tax positions, ongoing tax compliance, and structural tax issues during a transaction.
Financial due diligence (FDD) is the systematic review of a target company’s financial information during a transaction—typically performed by Big Four firms or specialist DD firms—to validate management’s reported financials, identify normalization adjustments, assess quality of earn…
