In response to continued M&A activity, the National Association of Corporate Directors has prepared a guide to board oversight of mergers and acquisitions. The handbook describes the current M&A climate and suggests questions to ask and resources to deploy at every step in the M&A transaction process, from strategy to post-merger integration, according to Steve Kalan, NACD director of business development.

The full publication is available exclusively to NACD members, but a complimentary executive summary is available to everyone for downloading.

“With merger and acquisition activity continuing to shift the business landscape, directors can benefit from learning the size and scope of this trend and how it relates to their board responsibilities,” NACD says on its website. “Director Essentials: Strengthening Oversight of M&A summarizes current M&A trends and guides directors in considering M&A as a strategic option. It will help directors fulfill their roles throughout the M&A process, from strategy to integration. Aimed primarily at public company directors, this report is also useful for fiduciaries of nonprofits and privately owned companies.”

Download the summary.

CNBC is reporting that Wal-Mart is eyeing a potential acquisition of Jet.com, an online retailer created to challenge Amazon, according to a Dow Jones report citing people familiar with the matter.

“Though it isn’t clear how much the world’s largest retailer would cough up for Jet, a personal familiar with the talks told Dow Jones that the website could be worth $3 billion, the organization reported Wednesday,” according to CNBC.

The report by Krystina Gustafson adds that one-year old Jet.com has raised more than $500 million in funding in its quest to dethrone Amazon, according to CrunchBase.

Read the article.

The U.S. Department of Justice has filed lawsuits to block the proposed mergers of four of the nation’s five biggest health insurers, reports The New York Times.

The proposed mergers involve Aetna and Humana, and Anthem and Cigna.

U.S. Attorney General Loretta E. Lynch said the proposed mergers “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”

“If these mergers were to take place, the competition among insurers that has pushed them to provide lower premiums, higher-quality care and better benefits would be eliminated,” she said.

“The companies responded by vowing, in varying degrees, to fight the government’s challenge,” report Leslie Picker and Reed Abelson. “Aetna, which had hoped to gain an advantage by being the first to reach a deal, aggressively defended its proposed merger, which it contended was different from the larger Anthem-Cigna deal that followed.”

Read the article.

Onex Corporation and Baring Private Equity Asia have announced their affiliated private equity funds have agreed to acquire the Intellectual Property & Science business (IP&S) from Thomson Reuters, for $3.55 billion. IP&S owns a collection of leading subscription-based businesses that provide a diverse customer base with access to scientific literature, patent, trademark, pharmaceutical and other curated content. The transaction is expected to close later this year subject to customary closing conditions and regulatory approvals.

Latham & Watkins LLP advised Onex and Baring Asia on the transaction with an M&A team led by Washington, D.C. partner Paul Sheridan and Chicago partner Shaun Hartley. Advice was also provided on benefits and compensation matters by Washington, D.C. partner Adam Kestenbaum; on tax matters by New York partner Lisa Watts; on intellectual property matters by New York partner Steven Betensky and Washington D.C. counsel Kieran Dickinson; on real estate matters by New York partner Dara Denberg; on senior secured bank financing matters by Washington, D.C. partner Jeffrey Chenard; on bond financing matters by Washington, D.C. partners Rachel Sheridan and Shagufa Hossain; on antitrust matters by Washington, D.C. partner Marc Williamson and Brussels partner Sven Völcker; and on other corporate matters by Boston partner William Schwab.

In a release, the company said IP&S provides comprehensive intellectual property and scientific information, decision support tools and services that enable academia, corporations, governments and the legal community to discover, protect and commercialize content, ideas and brands that are important to them. Its portfolio includes Web of Science, Thomson CompuMark, Thomson Innovation, MarkMonitor, Cortellis and Thomson IP Manager. Headquartered in Philadelphia, IP&S employs approximately 4,100 people across more than 75 offices in over 40 countries.

The release continues:

“IP&S is a diversified portfolio of high-quality, well-positioned businesses providing proprietary, curated content through products and services that are entrenched in their customers’ day-to-day activities,” said Kosty Gilis, a Managing Director with Onex. “We are delighted to have the opportunity to acquire the company and partner with management and Baring Asia to enhance IP&S’ operations and support its growth in the years to come.”

“We look forward to partnering with IP&S management and Onex to support the development of the company globally, particularly in Asia where we see a differentiated growth opportunity,” said Jean Eric Salata, Founder and Chief Executive of Baring Asia. “Already an established leader in China and across the region, we believe the outlook for the business is underpinned by an increasing shift towards more knowledge driven economies and a continued emphasis on research and development.”

“We are pleased to announce the agreement today to sell our Intellectual Property & Science business to Onex and Baring Asia,” said Jim Smith, President and Chief Executive Officer of Thomson Reuters. “With the completion of this divestiture, Thomson Reuters will be even more focused on operating at the intersection of global commerce and regulation.”

The transaction is expected to be funded with an equity investment of approximately $1.6 billion for 100% ownership of IP&S. Onex’ portion of the equity investment (approximately $1.2 billion) will be made by Onex Partners IV and certain limited partners as co-investors, including Onex.

Latham & Watkins LLP is serving as legal advisor to Onex and Baring Asia on the transaction.

About Onex 
Onex is one of the oldest and most successful private equity firms. Through its Onex Partners and ONCAP private equity funds, Onex acquires and builds high-quality businesses in partnership with talented management teams. At Onex Credit, Onex manages and invests in leveraged loans, collateralized loan obligations and other credit securities. The Company has approximately $23 billion of assets under management, including $6 billion of Onex proprietary capital, in private equity and credit securities. With offices in Toronto, New York, New Jersey and London, Onex invests its capital through its two investing platforms and is the largest limited partner in each of its private equity funds.

Onex’ businesses have assets of $36 billion, generate annual revenues of $23 billion and employ approximately 145,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex, visit its website at www.onex.com. The Company’s security filings can also be accessed at www.sedar.com.

About Baring Private Equity Asia
Baring Private Equity Asia is one of the largest and most established independent alternative asset management firms in Asia, with a total committed capital of over $10 billion. The firm runs a pan-Asian investment program, sponsoring management buyouts and providing growth capital to companies for expansion or acquisitions, as well as a pan-Asian real estate private equity investment program. The firm has been investing in Asia since its formation in 1997 and has over 125 employees located across seven Asian offices in Hong Kong, Shanghai, Beijing, Mumbai, Singapore, Jakarta, and Tokyo. Baring Asia currently has over 35 portfolio companies active across Asia with a total of 150,000 employees and sales of approximately $31 billion in 2015. For more information, please visit www.bpeasia.com.

Edward F. Donohue III of Hinshaw & Culbertson LLP has published the third installment in his series on client arbitration agreements for lawyers.

“Many attorneys have been using the same engagement agreements for decades designating standard commercial providers such as the American Arbitration Association to resolve client disputes,” he writes. “In recent years some have learned the hard way that their agreements do not comply with consumer protection rules that have developed in recent years. The failure to incorporate new standards into fee agreements means not only that non-conforming provisions will be deemed unenforceable.  In some cases attorneys will find that their arbitration agreements are wholly unenforceable.”

This installment has subheadings titled “Guess What? Your Fee Agreement is Non-Compliant,” “If Your Wealthiest Client is a “Consumer” Should You Abandon Arbitration Clauses?,” and “If You Still Want to Arbitrate Catch Up With the Rules.”

Read the article.

Platinum Equity and Stone Canyon Industries, LLC announced it has signed a definitive agreement for Platinum Equity to sell BWAY Corp. to Stone Canyon Industries LLC for $2.4 billion.

BWAY is a North American manufacturer of rigid metal and plastic containers used to package industrial, bulk food and retail goods. The sale is subject to regulatory approval and customary closing conditions, and is expected to close in August 2016.

Latham & Watkins LLP represented Platinum Equity in the transaction with a corporate deal led by Washington, D.C. partner David Brown and associates Daniel Kecman, Mariclaire Petty and Alexander Sevald. Advice was also provided on tax matters by New York partner Lisa Watts and associate Matthew Dewitz; on intellectual property matters by Washington, D.C. counsel Kieran Dickinson and Los Angeles associate Aryeh Richmond; on employee benefits matters by Washington, D.C. partner David Della Rocca and associates Matthew Conway and Nikhil Kumar; on environmental matters by Washington, D.C. partner James Barrett; on real estate matters by Chicago partner David Shapiro and associate Patrick Maloney; on government contracts matters by Washington, D.C. counsel Kyle Jefcoat; on export controls and sanctions matters by Washington, D.C. partner William McGlone and on debt financing matters by Washington, D.C. partners Scott Forchheimer, Patrick Shannon and Shagufa Hossain.

Platinum Equity acquired BWAY in 2012. In January 2013 BWAY acquired Ropak, a complementary producer of rigid plastic containers.

“BWAY’s success is a testament to strong collaboration with Ken Roessler and his management team and the value of truly integrating M&A with operations at every level of the investment,” said Platinum Equity Partner Louis Samson.  “The company is well positioned for continued success going forward.”

Samson said that BWAY’s EBITDA grew approximately 45% from 2012 to 2016 thanks to a combination of operational improvements and growth through acquisition.

“We have had a great partnership with Platinum Equity and we are proud of everything our teams have accomplished together,” said BWAY CEO Ken Roessler. “Today we have a fundamentally sound business with great momentum, and we are poised for continued growth and long-term profitability as we transition to Stone Canyon’s ownership.”

“BWAY’s success is a testament to strong collaboration with Ken Roessler and his management team and the value of truly integrating M&A with operations at every level of the investment. The company is well positioned for continued success going forward,” said Platinum Equity Partner Louis Samson.

Jim Fordyce, co-CEO of Stone Canyon Industries, said his firm is excited about BWAY’s potential and looks forward to working with Roessler and the management team.

“BWAY is a world class company with a great leadership team, dedicated employees and a very bright future,” said Fordyce.  “We look forward to working with Ken to help BWAY continue delivering on its strategic and operational plan as the company takes the next step in its evolution.”

Goldman, Sachs & Co. is serving as financial advisor to Platinum Equity and Latham and Watkins is serving as Platinum Equity’s legal counsel. BMO Capital Markets is serving as financial advisor to Stone Canyon Industries and Gibson, Dunn & Crutcher is serving as its legal counsel.

A blog post on the Cooley M&A site discusses the “option to acquire” structure, which addresses both the needs of a target company to develop a product or business on the one hand and the desire by a buyer to identify growth opportunities on the other.

“In an option to acquire transaction, the buyer agrees to pay the target an option fee in exchange for the exclusive option to acquire the target for a fixed price during an option period subject to certain conditions and agreements that are set forth in a fully negotiated and executed acquisition agreement,” the post explains. “As part of the arrangement, the parties may also enter into a collaboration agreement covering certain development activities of the target during the option period, with the achievement of the developments functioning as milestones to the buyer’s ability to exercise its option to buy. The collaboration agreement is usually separate from the option and acquisition agreement. Sometimes, the specific terms of the option may also be set forth in a standalone option agreement that is separate from the acquisition agreement.”

While options to acquire are fairly common in the medical device and life sciences industries, the option also provides attractive opportunities for funds and companies in other industries as well, as a way to get an inside track on new technology, the firm writes.

Read the article.

The National Association of Corporate Directors’ 2016 edition of Governance Challenges combines guidance from five strategic content partners of the NACD with broad M&A expertise. The report addresses the importance of early board engagement in strategy, the need for proactive dialogue with all key stakeholders, and the imperative to balance short-term and long-term goals throughout the M&A process.

A complimentary copy of the report is available for download.

Boards can use this new resource to:

• identify “drive and drag” factors that can advance or delay transaction results;
• monitor key aspects of the due-diligence process before approving the deal;
• understand the tax implications of a prospective transaction;
• consider exposure to risk from antitrust liability, cybersecurity challenges, and environmental liability; and
• select and retain talent and adjust compensation arrangements during the leadership change.

Download the report.

Thomson Reuters is offering a complimentary copy of the 2016 edition of Practical Law’s study, Reverse Break-Up Fees and Specific Performance: A Survey of Remedies for Financing and Antitrust Failure.

This year’s edition analyzed all 85 merger agreements entered into in 2015 for debt-financed acquisitions of U.S. reporting companies in deals valued at $100 million or more. The study provides a detailed guide to the negotiation of remedies for buyer breach by:

• Examining how deal characteristics such as the size of the transaction and the profile of the buyer affect the negotiation of enforcement and monetary remedies.
• Reviewing the sizes of reverse break-up fees in leveraged deals as percentages of deal value and as multiples of the target company’s break-up fee, and compares reverse break-up fees that cap the damages payable by the buyer against those that do not.
• Analyzing other techniques for allocating risk in debt-financed transactions, including the buyer’s financing covenants, the definition of the lenders’ marketing period, and the agreement’s “Xerox” provisions.

New this year, the study contains a supplement analyzing antitrust-triggered reverse break-up fees and other mechanisms for allocating the risk of antitrust failure. For this inquiry, the study surveyed all 49 agreements in the Practical Law What’s Market M&A database for 2015 that contained a reverse break-up fee payable for antitrust failure. These included 27 agreements for the acquisition of a US reporting company in deals valued at $100 million or more and 22 publicly filed agreements for private M&A deals involving the acquisition of a US company or business valued at $25 million or more.

Download the study and receive free temporary access to Practical Law online resources.

Cablevision’s top 10 executives may find themselves without a job after the company’s new owner, Netherlands-based Altice NV, completes the purchase of the Long Island-based company, possibly later this month, reports The New York Post.

The 10 Cablevision executives include General Counsel David Ellen and CEO James Dolan.

“Altice founder Patrick Drahi told Cablevision staff when the deal was first announced last year that he would seek to cut executives earning more than $300,000,” The Post reports.

Read the article.

Photo by Mike Mozart of JeepersMedia

Regulators fighting the merger plan of Office Depot and Staples face a decision from a judge that may hinge on the veracity of the government’s relevant product market, reports Policy and Regulatory Report, a Mergermarket Group company. The issue of whether the Federal Trade Commission (FTC) gerrymandered its market has repeatedly surfaced during the government’s pursuit of a preliminary injunction against the proposed merger.

PaRR Global (Policy and Regulatory Report) spoke to various independent sources to assess holes in the arguments of both the FTC and the merging companies.

In its case, the FTC defined the relevant product market as “consumable office supplies,” such as pens and paper, which constitute a so-called cluster market, according to the PaRR analysis.

A cluster market is used in antitrust theory to group separate individual relevant product markets, such as the individual market for paper and the individual market for pens, into a wider market for analytical convenience.

Clustering is appropriate “only when the individual products face similar competitive conditions,” according to the government’s proposed findings of fact.

Read the article.

ExamWorks Group, Inc., a leading provider of independent medical examinations, peer reviews, bill reviews, Medicare compliance services, case management services, record retrieval services, document management services and other related services, has announced that it has entered into a definitive agreement to be acquired by an affiliate of Leonard Green & Partners, L.P., for $35.05 per share in cash, representing a total transaction value of approximately $2.2 billion, as detailed in a company press release.

The merger is subject to approval from ExamWorks shareholders and other customary closing conditions and is expected to close in the third quarter of 2016.

Latham & Watkins LLP represented Leonard Green in the transaction with a corporate deal team led by New York partners Howard Sobel, John Giouroukakis and Paul Kukish with associates Michael Young in Orange County and Eyal Orgad and Andrew Ritter in New York. Advice was also provided on finance matters by New York partner Joshua Tinkelman with associates Sonja Pollack and Jake Burne; on regulatory matters by Washington, D.C. partner Stuart Kurlander and counsel Nicole Liffrig Molife with associates Michael Dreyfus and Robert Canning; on benefits and compensation matters by New York partner Bradd Williamson, London partner Catherine Drinnan and New York counsel Rifka Singer with associates Anisha Mehta in New York and Lucy Boyle in London; on intellectual property matters by New York partner Jeffrey Tochner with associate Tiana Hertel; on tax matters by Chicago partner Joseph Kronsnoble with associate Sarah Smoler; and on environmental matters by New York counsel David Langer.

ExamWorks’ Board of Directors, on the recommendation of a special committee composed entirely of independent directors (the “Special Committee”), approved the merger agreement and recommend that the Company’s shareholders vote in favor of the transaction.  In accordance with the merger agreement’s “go shop” provision, the Company will conduct a market test for 25 business days concluding June 1, 2016.

Richard Perlman, ExamWorks’ Executive Chairman and James Price, Chief Executive Officer, said: “ExamWorks started a little over eight years ago from a concept and with the hard work and commitment of each and every one of our 3,600 employees, has grown to be the industry leader servicing over 6,000 clients on a global basis generating almost $1 billion of annual revenues.  We are immensely proud of this accomplishment, which delivers significant value to our shareholders.  We also want to thank our clients for their strong support and assure them of our continued commitment to providing unparalleled services.”

John Baumer, Senior Partner of Leonard Green & Partners, L.P., said: “We are excited to partner with ExamWorks’ management team and organization.  We fully support the Company’s commitment to its clients and look forward to the next phase of the Company’s growth.”

Peter Graham, Chairman of the Special Committee, said: “The Company received an acquisition proposal from Leonard Green & Partners, L.P., and after extensive negotiations and careful consideration in conjunction with our advisors, the Special Committee of ExamWorks’ board has unanimously concluded that this transaction is in the best interest of our shareholders.”

The Company expects to release its Q1 2016 earnings press release on or before May 10, 2016.

Goldman, Sachs & Co. and Evercore Group L.L.C. are serving as financial advisors to ExamWorks.   Paul Hastings LLP is serving as legal advisor to ExamWorks.  Latham & Watkins LLP is serving as legal advisor to Leonard Green & Partners, L.P.  Fully committed debt financing is being provided by affiliates of BofA Merrill Lynch, Barclays and Deutsche Bank Securities Inc., each of which is also serving as a financial advisor to Leonard Green & Partners, L.P.

M&A deal volume in the U.S. reached a record high in 2015, reports the National Association of Corporate Directors. The NACD is offering a complimentary copy of the summary from a recent meeting of the NACD Advisory Council on Risk Oversight, which focused on the board’s oversight of M&A transactions including understanding the board’s role during a transaction, identifying questions to consider when evaluating potential deals, and establishing a process for determining transaction success.

Topics covered include:

• Engaging management about possible deals
• Determining if a proposed deal advances company strategy
• Identifying culture and talent risks
• Measuring the success of a transaction
• Establishing effective oversight processes

Download the summary.

Three bankers have left Goldman Sachs Group Inc. after the U.S. firm determined they breached internal guidelines in connection with the bank’s advisory role on the planned acquisition of a consumer company in the Middle East, reports Bloomberg News, citing sources familiar with the matter.

“The bankers who departed in December were involved in advising a potential buyer on an investment in fast-food company Kuwait Food Co., which operates KFC restaurants in the Middle East, said the people, who asked not to be identified because the matter is private,” the report says. “Two employees were based in Dubai and another in London, the people said.”

The company is thought to have discovered that two of the bankers didn’t identify themselves as bank employees when they met with the target company attended by other financial services firms. “The third banker was aware that colleagues participated in the meeting, two of the people said, and all three were deemed to not have adhered to the firm’s internal guidelines. Other employees were also disciplined as a result of the incident, the people said.”

Read the article.