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EUROPEAN GOODWILL IMPAIRMENT STUDY 2011-2012

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The study shows that while the economic outlook across Europe remains distinctly uncertain, many companies have been reporting increasing profits, while others are still struggling with the repercussions of the financial crisis, yet their goodwill impairment levels remain surprisingly low. Of particular note is the fact that booked goodwill impairments for 2010 are at their lowest levels in five years.

Click here to download the study.

2010 Purchase Price Allocation Study

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Houlihan Lokey has completed its 10th annual Purchase Price Allocation Study (the “2010 Study”) by reviewing public filings for 1,271 completed transactions in 2010 and summarizing the results for certain transactions. The 2010 Study provides several statistics, other annual data and a comparison to certain 2009 results (the “2009 Study”) and 2008 results (the “2008 Study”).

To download your complimentary copy of the study, please fill out the form here.

2010 TRANSACTION TERMINATION FEE STUDY

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“In the 2010 Study, termination fees as a percentage of transaction value ranged from 0.9% to 30.4%, with a mean of 3.5% and a median of 3.3%.”

Given the time and expense involved in negotiating and structuring a proposed transaction, acquirers are continuously looking for creative ways to deter competing bids before the consummation of a transaction. Protective devices used by acquirers are heavily negotiated and may include termination fees, “lockup” agreements and “no-shop” provisions. Conversely, in seeking to help maximize stockholder value, boards of directors of target companies try to obligate the acquirer to consummate the agreed-upon transaction while maintaining the flexibility to seek and accept a superior offer for the target.

Properly crafted, a termination fee provision can facilitate the sale of a company by ensuring that the bidder will receive a material “consolation prize” to defray its investment—in time, out-of-pocket expense and opportunity cost—if the transaction is not consummated. On the other hand, termination fees protect the acquirer by effectively increasing the price that a third-party bidder will need to pay in order to consummate a competing transaction.

Houlihan Lokey is pleased to share with you its 2010 Transaction Termination Fee Study, which summarizes key termination fee metrics for M&A transactions announced in 2008, 2009 and 2010. We have also analyzed termination fees as a percentage of target enterprise value to reflect the growing judicial recognition of enterprise value—as a benchmark for assessing acceptable termination fee levels.

To download Houlihan Lokey’s 2010 Transaction Termination Fee Study, click here.