NET WORK
EMERGING TRENDS SERIES TRENDS IN M&A Russell Benjamin Hedman, Partner, Hogan Lovells
EXECUTIVE SUMMARY
EMERGING TRENDS SERIES NETWORK
Emerging Trends in M&A Hogan Lovells’ Russell Hedman BIHC recently spoke with Russell Hedman, a partner in the Denver office of Hogan Lovells. Hedman specializes in complex M&A and investment transactions.
Q: W hat are the main trends you see in M&A in 2022 and what is driving these trends?
A: T he main trend is a continuation of the
incredibly competitive deal market, which sellers are using in their favor. We continue to see record amounts of dry powder for private equity, increasingly active family office investors, and strategic buyers with great ability to finance deals. And the rise of SPACs is still playing a role—there are currently approximately 600 SPACs sitting on about $1 trillion, looking for targets. Buyers can’t afford to be caught flat footed in this kind of highly competitive environment. Buyers need to be nimble and ready to differentiate themselves in the dealmaking process and need to be strategic in addressing sellers’ concerns in innovative ways that get the deal done without unnecessary exposure.
One example is the use of RWI (reps & warranties insurance). In the current market, sellers who would normally expect to provide indemnification will often draw a hard line and insist on a “public-style” deal for private company sales, which means a buyer would need to look to RWI as the only avenue for post-closing recovery. For a lot of powerful acquirers, this was never even considered in the past. Buyers should revisit these kinds of considerations now, in advance of a deal, as opposed to making a split‑second decision on a new risk.
Q: I n light of the dynamic M&A market, when and how should GCs and companies engage outside counsel?
A: I t is always a good idea to get expert outside
counsel involved early. But even more important than the timing is bringing outside counsel into big-picture decisions when the pressure is high. Conversations like this with outside counsel are beneficial for GCs and companies because outside counsel have a broader view of the market and can share insights about trends, strategies, and important deal terms. Outside counsel teams with broad and diversified skillsets can be adept at finding new solutions to old problems.
Q: W hat are some best practices for GCs and companies in M&A?
A: B uyers needs to be creative and flexible to
differentiate themselves and succeed. GCs need to think in advance about concessions they will be willing to make to sellers to keep a deal moving forward without exposing the company to undue risk. Where can I give without giving much at all? How can I sell that internally and externally?
EMERGING TRENDS INTERVIEW SERIES
| PAGE 2
EMERGING TRENDS SERIES NETWORK
About the BIHC Network & Emerging Trends The Black In-House Counsel (BIHC) Network works with legal departments and law firms to advance Diversity, Equity, and Inclusion in the legal profession. We create content, events, networks, and professional development training for corporate legal departments and law firms. A key part of our mission is to showcase the talents of leading lawyers of color in top law firms to in-house legal departments. Emerging Trends features insights from leading partners of color on key trends shaping the business landscape over the next 12 months. Each Emerging Trends briefing provides concise information on what general counsel and boards need to know about and best practices in how to approach this topic.
BIHC is pleased to hear from the following Hogan Lovells partners in the Emerging Trends Series:
Tifarah Roberts Allen
Shelita M. Stewart
Partner
Partner
WASHINGTON, D.C. Practice Group: Corporate & Finance
WASHINGTON, D.C. Practice Group: Litigation, Arbitration, and Employment
Russell Benjamin Hedman
Courtney Devon Taylor
Partner
Partner
DENVER Practice Group: Corporate & Finance
PHILADELPHIA, NEW YORK Practice Group: Litigation, Arbitration, and Employment EMERGING TRENDS INTERVIEW SERIES
| PAGE 3