M&A Disputes: A Professional Guide To Accounting Arbitrations by A. Vincent Biemans and Gerald M. Hansen

The Blurb On The Back:

Handle M&A disputes with an insider’s skillset.

M&A Disputes provides a detailed look at the many components and nuances of M&A purchase price adjustment mechanisms and post-closing disputes.  Although common, the negotiation and resolution of M&A disputes requires specialised knowledge and can be opaque to non-practitioners.  This step-by-step guide takes you inside the world of M&A post-closing purchase price adjustments and disputes to provide an intimate look at how the process works.

This practitioner’s reference offers tools and guidance that can assist in preventing and resolving issues along the entire lifestyle of a transaction.  It enables you to: 

– gain a thorough understanding of the M&A dispute framework to guide you along the way

– Benefit fro situation-specific advice aimed at limiting the scope of disputes or preventing them altogether while fully preparing to win

– Understand the “dos” and “don’ts” of persuading an accounting arbitrator to achieve the best possible outcome.

Until the purchase price is final, you need M&A Disputes.

You can order M&A Disputes: A Professional Guide To Accounting Arbitrations by A. Vincent Biemans and Gerald M. Hansen from Amazon UK, Waterstone’s or Bookshop.org UK.  I earn commission on any purchases made through these links.

The Review (Cut For Spoilers):

A. Vincent Biemans and Gerald M. Hansen are managing directors of Berkeley Research Group and assist clients with M&A disputes.  This is a US-centric guide that primarily focuses on carrying out accounting arbitrations on a net working capital adjustment and at times it’s a little dry and dense and gets repetitive but if you’re new to this area and have a finance background, then it’s a useful guide that provides a good overview of the key issues.

I picked this up because I have had a small amount of peripheral experience of being involved in accounting disputes on M&A deals and wanted to know more about the in case I run into any more during my career.  Biemans and Hansen are based in the US and this book focuses on US disputes and US GAAP whereas my career is UK and Europe based.  However, while I cannot comment on what (if any) difference there would be between US and UK GAAP and its impact on adjustments, I did find that the book generally accorded with the process as I’ve experienced it so there’s clearly cross-over here that means non-US people can benefit from it.

The book is clearly set out and takes the reader through the process of making adjustments to the purchase price after an M&A deal has closed, how disputes can arise and what the different interests are of the seller and the buyer with practical advice on how best to represent them.  The specific focus of the book is on net working capital adjustments, which the authors cover thoroughly with numerous examples but they also examine practical issues such as problems of dealing with historic accounts, due diligence, issues with inventory (e.g. counts being incorrect, items being obsolete, the impact of long term warranty commitments and how that should be treated, and the treatment of accounts receivable and bad accounts owed).  I was a little disappointed that there was only a brief section on locked box mechanisms (although what there is, is informative) – I understand that this is because locked box mechanisms should, in theory, have fewer post completion adjustments due to their nature but I would have still liked some discussion on how “leakage” mechanisms work and what key issues might be.

There’s a particularly good section on the stages in the arbitration process and the mechanics of carrying one out.  If you’re not a lawyer, then I think you’ll get a lot from this as the authors are very clear on the different elements and how the buyer and seller’s interests diverge while also setting out practical tips on how to best support their position.  They also include good chapters on how to select an appoint an arbitrator (including how to handle conflicts) and then the form of the actual award.  I think it was a good move by the authors to include this because if you have a finance background, you won’t necessarily be familiar with this and it busts a lot of myths while making it easy to understand.

I don’t come from a finance background and I have to say that I did find some of the discussions of GAAP and past practices in accordance with GAAP a little difficult to follow.  I also had to re-read some of the sections on treatment of assets and liabilities (including contingent liabilities) but I think anyone more versed in accountancy would have no problem.  I also found that the authors are quite heavy handed in terms of repeating their points (which I understand is a reinforcing technique so that the message sticks but can also get a little dull) and although each chapter is divided into subsections, the layout can be quite dense at times, making it difficult to get through.

All in all, I did take a lot away from the book and I think it gives you a good overview of the subject if you’re new to it.  However, at times it was a difficult book to keep pushing through and I think it’s one of those books where just spritzing the layout and adding some diagrams or different fonts would have made a big difference and made it less of an effort to get through. 

Thanks to the Amazon Vine Programme for the review copy of this book.

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