A Deal Terms Study, Created Using Kira Machine Learning Contract Analysis Software
This report summarizes our findings on various relationships between materiality scrape provisions and indemnification baskets and/or deductibles. Specifically, we reviewed:
- The prevalence of and variation in materiality scrape provisions in private target M&A agreements publicly filed in 2017 and 2018 that include indemnification baskets and/or deductibles;
- The association between double materiality scrape provisions and larger indemnification baskets (based on percentage of deal value); and,
- The association between the prevalence of double materiality scrape provisions and eligible claim thresholds.
Kira’s state-of-the-art machine learning technology automatically identifies and extracts information from contracts and comes with over 1,000 built-in provision models. A full list of the currently available M&A deal point-related provisions that Kira can identify out of the box can be found at the end of this report.