We are pleased to introduce this second edition of Lexology Getting The Deal Through – Technology M&A. As technology continues to rapidly penetrate every facet of our lives, it continues to be a leading driver of mergers and acquisitions. The technology sector has seen deal value continue to climb as digital disruption overtakes segments such as fintech and Big Data. According to Mergermarket data, in the first half of 2019, although the technology sector had a 16 per cent decrease in volume compared to the same period in 2018, the deal value of such deals represented a 61 per cent increase. In recent years, to stay competitive, companies have needed to either build or buy technology solutions, and often M&A has been their best option. The purpose of this guide is to provide an overview of the various factors affecting technology M&A transactions across various jurisdictions.
We begin by exploring the laws, regulations and policies that affect the structure and execution of technology M&A transactions, typically involving intellectual property, data privacy and competition legal considerations. Many technology M&A transactions also deal in sensitive sectors or regulated industries, creating the possibility of mandatory governmental review or prior approval or authorisation, particularly for those transactions involving foreign investors.
Our commentators also describe the due diligence processes in their respective jurisdictions. Specifically, we describe what a buyer will need to review and evaluate to confirm a target’s ownership or rights to use critical IP assets, and how counsel confirms whether the intellectual property is subject to any liens or security interests. In addition, we explore what information is publicly available for searching and confirming the ownership of IP assets, and what requirements exist under applicable law for the effective transfer of IP rights from employees and contractors. Our commentators also discuss how to assess data privacy and cybersecurity risks for the purposes of M&A diligence, legal requirements for the transfer of rights under IP-related agreements, and the processes and procedures for developing software, including the use of open source components.
The representations and warranties and other deal terms for technology M&A transactions are also discussed. Our commentators describe what is customary or ‘market’ with respect to representations and warranties, covenants and closing conditions for technology M&A agreements across various jurisdictions, as well as the duration of survival periods and liability allocation for breaches of representations and warranties.
With the steady emergence of new technologies and disruption of traditional industries, the technology M&A sector is poised to continue to grow and the demand for tech-savvy legal advisers is set to rise. We hope this book provides our readers with practical guidance and reference points for getting the technology M&A deal through. We want to thank all of the writers and editors for their contributions and dedication to this guide.