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Interview with HVAC Seller – Pete Korellis

Sun Acquisitions

Describe your business? My wife and I purchased the business in 2005. Our focus is mainly on apartment buildings, churches, education and industrial businesses. I was open minded to either: Selling and retiring or Selling and staying on to build a bigger business What was the sale process like?

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Sandbagging Provisions

What's Market

Market Trends: What You Need to Know “Sandbagging” concepts are often the subject of intense negotiation in M&A transactions. Looking at prior ABA studies, the number of deals with pro-sandbagging provisions dropped from a high of 56% in the 2005 study to a low of 29% in the current, 2021 study.

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Use of Knowledge Qualifiers for Representations and Warranties

What's Market

Specifically, including constructive knowledge has steadily increased over the nine ABA studies— from 52% of reviewed deals in the 2005 ABA study to 81% in the most recent 2021 study (down slightly from 86% in the 2019 study). The parties must still negotiate the scope of the seller's knowledge.

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10(b)(5) & Full Disclosure Representations

What's Market

The scope and detail of these representations and warranties are often heavily negotiated and tailored to reflect not only the nature of the target and its business, financial condition, and operations, but also the relative negotiating strength of the buyer and seller. Observations. ” Observations. ” Observations.

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Indemnity Baskets

What's Market

This article examines how buyers and sellers are negotiating indemnity baskets in private company M&A transactions, as shown in the American Bar Association's private target deal points studies. Indemnity baskets are universally included in M&A purchase agreements.

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Disclosure Schedule Updating

What's Market

Transaction parties negotiated expanded or new representations to address the effect of Covid-19 on the target business, as well as the policies and protocols for dealing with those effects. Buyers and rep and warranty insurers are focusing more aspects of their due diligence on virus-related matters.

M&A 52
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No Undisclosed Liabilities Representations

What's Market

In addition, an operating business generally has many ordinary course business liabilities that are not typically liabilities included in a GAAP balance sheet (e.g., Thus, in deal negotiations, NUL representations are often described – – particularly if broad in scope – – by sellers as redundant or duplicative.