Private Equity M&A Fundamentals: Core Deal Structures and How They Differ from Strategic M&A

Charles Blank | Lincoln International LLC

Charles leads the Disputes team within Lincoln’s Valuations & Opinions Group, where he provides dispute resolution advisory services for mergers and acquisitions (M&A) transactions, working to resolve the resolution of purchase price adjustments disputes including those related to working capital and earnouts. He advises private equity firms, corporates, private company founders and attorneys on reviewing and preparing closing statements, preparing dispute notices and presenting positions in front of an accounting arbitrator.

Charles leverages nearly three decades of financial experience when providing M&A dispute resolution services, including serving as a neutral accountant in hundreds of transactions over the last 15 years. In addition, Charles assists clients with representations and warranties insurance claims and serves as an expert witness in arbitration and litigation. Charles approaches client relationships as a long-term and collaborative effort, and he seeks to maximize transaction value by advising clients on the purchase price settlement process.

Prior to joining Lincoln, Charles led the M&A dispute solutions group in Grant Thornton’s forensic practice and held a similar role at Huron Consulting Group. Earlier in his career, he worked at Moody’s Investor Service and Deloitte in auditing and accounting roles. Charles’s experience as a Big 4 financial statement auditor, accounting analyst and extensive experience as a neutral accountant provide a foundation for his work today supporting buyers and sellers.

Charles earned a Bachelor of Arts in Economics from Northwestern University. He is a Certified Public Accountant and holds the Chartered Financial Analyst designation.

Kelly DePonte | Kelly DePonte Advisory LLC

Kelly DePonte is Managing Director of Kelly DePonte Advisory LLC, a boutique advisory and consulting firm focused on the institutional private investment markets, especially private equity. He has 32 years of experience in private alternative fund investment and fundraising. He has an MBA from the UCLA Anderson School of Management and a BA from Stanford University. Kelly is currently a member of the Advisory Board of the Investment Management Due Diligence Association, a Senior Advisor at Probitas Partners, a global private markets placement agent, an Advisor with Hanover Square Capital (UK) Ltd, a financial services firm based in London with a sister office in Singapore, and is an Advisor with InRider Partners, a provider of investor relations solutions to private market firms. Kelly is also Secretary of the Board of Trustees and Chair of the Investment Committee of the Bennington Museum, an art and history museum in Bennington, Vermont.

Session I – Private Equity M&A: How Deal Structures Reflect Strategy, Exit Planning, and Control | 1:00pm – 2:00pm

• Differences in deal structuring due to differences in buyer strategies between private equity investors and strategic acquirers
• How planning for private equity exits manifests itself in acquisition documents
• Value creation through major operational changes — and key changes in personnel
• Control and minority investor protections — both in buyouts and growth capital

Break | 2:00pm – 2:10pm

Session II – Financial and Accounting Issues in Private Equity M&A: Structuring Working Capital and Earnout Provisions to Protect Value and Avoid Disputes | 2:10pm – 3:10pm

• Purchase price mechanics: Working capital, net debt, and cash-free/debt-free concepts
• Working capital and earnouts: Drafting strategies, risks, and common traps
• Representations & warranties insurance: Role in risk allocation
• Best practices for reducing ambiguity in purchase price adjustment mechanisms
• Lessons from disputes: How careful drafting prevents problems later