My name is Charlotte and I am currently undertaking my second seat in Projects. I am usually based in the Manchester office but currently working from home during the pandemic.
I did my first seat in the Corporate team. There are three main streams of work in the corporate team:-
- Mergers & Acquisitions (M&A)
- Private Equity
- Public Companies/Equity Capital Markets
I had some experience in each of these areas but this blog post is going to focus on M&A work. I hope it will give you a comprehensive overview of the types of tasks you may be asked to complete as a M&A Trainee at Pinsent Masons.
In a corporate M&A transaction you will generally either be acting for the buyer or the seller. The company that is being sold is usually referred to as the ‘target company’.
Due Diligence – what is it and what did I like about it
The buyer wants to know as much as possible about the company they are buying. As their solicitor you would request information and documents from the seller’s solicitors that would be of interest to the buyer (in line with a scope agreed with the buyer). A full breakdown of all of these details is then presented to the buyer in a due diligence report, which will include suggestions of how to deal with any potential issues that arise.
As the seller’s solicitor, you liaise with your client to respond to the due diligence enquiries posed by the buyer by requesting the relevant information and documents and managing the data room.
I assisted with drafting due diligence reports for a number of transactions. As a trainee, it is a great task to get your teeth stuck into as you have to search through all the information provided and try to work out what you think should be flagged to our client. This helped me understand the wider implications these ‘issues’ might have for the deal, such as affecting the sale price and the key warranties and indemnities to be negotiated in the sale and purchase agreement.
Due diligence is also a great way to get to know colleagues in other departments, as it often also requires input from other teams including Employment, Property and Commercial. As a trainee, you will likely be asked to liaise with colleagues in these teams to ensure that their specialist advice is received.
Full diclosure about preparing Disclosures
As previously explained, the buyer will carry out due diligence on the target company. However, in order for the seller to protect themselves against future claims, they also need to disclose certain information about the target company. Usually, the seller’s solicitor drafts a disclosure letter which includes general and specific disclosures about the target company.
General disclosures include information which is already in the public domain such as the directors of the target company. Specific disclosures are made against the warranties the seller gives. Warranties are promises about the company given by the seller to the buyer, for example, a common warranty would be that the target company has ‘no pending or threatened litigation’. A specific disclosure against this warranty could be that the target company has received a letter claiming damages for an alleged breach of contract. The disclosure letter should set out details of this claim and should refer to any relevant documents (such as the claim letter and any related correspondence).
The buyer’s solicitor has the task of marking up the disclosure letter to ensure that the seller has provided full and clear disclosures and that all relevant documentation is also provided.
Being completely honest, disclosure can be a very long and painstaking exercise! If you are involved with the sale of a larger organisation, the information you need can come from different departments such as HR or IT, and these people are often asked to help with disclosure whilst continuing to do their full time role in the company. Consequently, disclosure is a real test of your people management, communication and project management skills as you will be relied upon to keep track of the responses you have received, and what is outstanding.
Disclosure is an extremely important part of the sale process and I would definitely getting involved in it if you have the opportunity as it gives the trainees an excellent opportunity to get to know other teams and it’s a very rewarding project to work on.
Drafting: documents list and ancillaries
Most deals use a documents list to keep track of what documents are required, who is responsible for drafting what (buyer or seller) and the status of the document (i.e. has it been drafted, has it been shared with the other side, has it been agreed?).
Ancillaries are documents required for the transaction which aren’t the main contract documents, for example, board minutes, share certificates and companies house forms.
This is the time I felt most like a ‘lawyer’. As a trainee you are often given responsibility for drafting the entire suite of ancillary documents. The volume of documents can be quite daunting the first time you start drafting but like any form of writing, you will develop your own style for as you do more of it. My advice would be to ask one of the juniors in the team for a previous example and then just go for it, using the example as a guide. Don’t be afraid of getting lots of red pen back on your work – it’s the only way to improve!
If completion is taking place at your office, you may be asked to assist with printing off the documents and preparing the completion meeting room. You may also be asked to make sure everything is signed and witnessed correctly and all necessary documents are received from the seller/given to the buyer as agreed in the contract.
Who doesn’t love to see something they’ve worked on come to a close – especially if there are a few celebration drinks involved! This may be the most glamorous part of the corporate seat, but it can also be a very tiring and challenging task, so don’t be fooled. Making sure you are prepared beforehand is crucial to making things go swiftly. Completion meetings can last for a very long time, and during this time you will need to be presentable, proactive, able to respond to any issues that could crop up and perhaps most importantly, able to make good small talk with the other parties among which can include some very prominent and senior people!
Post-completion and bibles
Filing/books: you may be asked to ensure the correct filings are made at Companies House following completion, and/or to update the statutory books.
Bible making: the parties and/or the lawyers often like to keep a ‘bible’ which is a file that includes the key documents from the transaction signed by all parties, so that they can refer back to these in future transactions. These can be in electronic and/or paper form and is a common trainee task.
As someone who likes to be organised there’s something quite satisfying about getting everything into order after what may feel like a chaotic few days/weeks leading up to completion. Make sure you’re nice to your PA and they’ll always help, including when you break the printer trying to scan too many documents in at once…
Any questions, feel free to ask!
I hope that this has given you a flavour of the types of tasks you could be involved with! Please feel free to contact me on LinkedIn should you have any questions about this or about working at Pinsents in general ?