Negotiating Purchase Agreements for $25 to $500+ Million M&A Deals

About the Episode

Everything buyers and sellers need to know about negotiating a $25 million to $500+ million purchase agreement. Drew Pollekoff discusses the elements of a purchase agreement for middle-market transactions, including how to lay the groundwork with the LOI, details on each section of the agreement, common mistakes that can cause issues with negotiations, the process of preparing and signing the purchase agreement and who is involved, and advice to buyers and sellers on how to get the transaction closed.

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“The purchase agreement is the contract itself which is going to govern an acquisition. It’s really important for the buyer and the seller to clearly articulate every single term and provision that you expect to be in the purchase agreement so that things that were missed don’t come up after the fact.” 

Drew Pollekoff 

In this Episode

2:19 How important is the purchase agreement in an M&A transaction?
5:26 What are the most frequent names for a purchase agreement?
10:59 When is a merger primarily used in an M&A transaction?
12:43 Which is more common – a stock purchase or an asset purchase?
15:28 When is the purchase agreement typically prepared, and who prepares the draft of it?
17:01 What’s the typical process for drafting and negotiating the purchase agreement?
19:57 What are the common mistakes made in the LOI, and how do those impact the purchase agreement negotiations?
21:20 What issues might need to be addressed in the LOI to avoid problems in later negotiations?
24:05 What is a staggered sign and close? Why might this signing process be desirable?
29:33 What are the major components of a purchase agreement?
32:40 How is the legal structure of the transaction covered in the agreement?
36:25 How does escrow work in M&A transactions? Why is it important?
39:39 What are the different forms of considerations, and how is the purchase price paid?
41:36 Why are representations and warranties important? 
44:30 What are covenants, and what do they typically address? 
46:50 Under what conditions does a transaction become subject to regulatory approval by the government?
54:14 What does the indemnification section cover? 
57:16 Is anything exciting covered in the miscellaneous section?
1:00:04 After the closing, which section of the purchase agreement matters the most to the seller?
1:03:45 Which section of the purchase agreement is the most difficult to negotiate?
1:09:48 What’s the best advice for buyers and sellers when it comes to the purchase agreement?

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Resources Mentioned in This Episode

Terms Mentioned in This Episode

  • Asset Purchase Agreement (APA): A deal in which a business sells its assets to an acquirer, structured as an asset purchase or sale.
  • Definitive Purchase Agreement (DPA): The final agreement between buyer and seller, often labeled “Definitive Agreement” in legal contexts due to the various forms a purchase agreement can take.

Meet Our Guest

Drew Pollekoff

Drew Pollekoff

Corporate Partner at King & Spalding

Drew Pollekoff is a corporate attorney at King & Spalding, concentrating on mergers and acquisitions and private equity transactions, as well as corporate governance, corporate finance, securities law, and general corporate matters. Drew has represented and advised acquirers and targets on a number of high-profile M&A transactions throughout his career, including multibillion-dollar M&A transactions, cross-border transactions, and contested M&A transactions.

Prior to joining King & Spalding, Drew began his career as an M&A associate at Skadden, Arps, Slate, Meagher & Flom LLP. Drew received his J.D. from Georgetown University Law Center, where he graduated cum laude and was a senior editor of The Georgetown Law Review. He received his undergraduate degree in Public Policy and Economics from the University of Michigan. Drew has authored numerous articles on key M&A topics and developments.

Location Location: Washington, DC | Northern Virginia, USA

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