Standardization of a Share Purchase Agreement (“SPA”) for small and mid-CAP transactions

WHAT IS IT AND WHO IS INVOLVED?

A team of experts, including but not limited to inhouse legal departments, law firms, banks, legal designers and universities, aims to create a wildly accepted Standard SPA for small- and mid-size private M&A transactions. Such Standard SPA template will provide generic document structure and basic T&C’s, and in addition guidance on relevant aspects of the M&A transaction such as a fair and balanced allocation of risks and responsibilities.

WHY DO WE THINK IT IS USEFUL?

A Standard SPA will allow to execute transactions faster, more effective and in a digital negotiation & execution environment. Instead of arguing over the “best” template the team can focus on the specifics of the transaction.

HOW IS IT USED?

At the start of a new transaction, the parties of an M&A transaction might agree to the use the publicly available Standard SPA. It can also be used for future automation scenario, e.g. on a Common Legal Platform or other collaboration tools.

HOW DO WE GET THERE?

The project will be co-headed by LLI representatives and a designated project resource from Deloitte and carried in the following 5 phases:

  1. Scoping: understand and gather content
  2. Standardization: jointly create a Standard SPA template draft
  3. Adoption: align with all stakeholders and communication plan
  4. Visualization: showcase the “simplification” of templates
  5. Digitalization: agree on how to automate the template (clauses)

TIMELINE

The project has been accepted by the Liquid Legal Institute in March 2019 and is now open for members.