M&A Monday: Non-Compete and Other Must-Have Restrictive Covenants
The article stresses that robust restrictive covenants—especially non‑competes—are essential in M&A transactions to safeguard a buyer’s investment. Sellers are typically bound for five years, with clauses covering family affiliates and tailored side‑ventures. Proper drafting, often in a separate agreement, ensures enforceability and prevents accidental carve‑outs, while lenders and investors routinely demand these protections. If a breach occurs, buyers should engage specialized litigators and seek swift injunctive relief to halt competition and preserve business value.
M&A Monday: Incentivizing Employees After Closing
In M&A deals, retaining staff after closing hinges on well‑designed incentive programs. Sponsors can choose between simple Christmas performance bonuses, phantom equity arrangements, or full equity plans such as stock options, each with distinct tax and legal considerations. The article...