Earnouts: A Study of Financial Contracting in Acquisition Agreements

We empirically examine earnout contracts, which provide for contingent payments in acquisition agreements. Our analysis reveals considerable heterogeneity in the terms of earnout contracts, i.e. the potential size of the earnout, the performance measure on which the contingent payment is based, the period over which performance is measured, the frequency with which performance is measured, and the form of payment for the earnout. Consistent with the costly contracting hypothesis, we find that the terms of earnout contracts are associated with measures of target valuation uncertainty, target growth opportunities, and the degree of post-acquisition integration between target and acquirer. We conclude that earnouts are structured to minimize the costs of adverse selection and moral hazard in acquisition negotiations.

Do Fairness Opinion Valuations Contain Useful Information?

We analyze target firm valuations disclosed in the fairness opinions of negotiated mergers between 1998 and 2005. On average, acquirer advisors exhibit a greater degree of valuation optimism than do target advisors. Top-tier advisors produce more accurate valuations than lower-tier advisors, but valuation accuracy is unrelated to the contingency structure of advisory fees. The stock price reactions to merger announcements and to the public disclosure of fairness opinions are positively related to the difference between target firm valuations contained in the fairness opinion and the merger offer price. We conclude that fairness opinions contain information not previously available to market participants.

New observations regarding deterministic, time reversible thermostats and Gauss's principle of least constraint

Deterministic thermostats are frequently employed in non-equilibrium molecular dynamics simulations in order to remove the heat produced irreversibly over the course of such simulations. The simplest thermostat is the Gaussian thermostat, which satisfies Gauss's principle of least constraint and fixes the peculiar kinetic energy. There are of course infinitely many ways to thermostat systems, e.g. by fixing $\sum\limits_i{|{p_i}|^{\mu + 1}}$. In the present paper we provide, for the first time, convincing arguments as to why the conventional Gaussian isokinetic thermostat ($\mu=1$) is unique in this class. We show that this thermostat minimizes the phase space compression and is the only thermostat for which the conjugate pairing rule (CPR) holds. Moreover it is shown that for finite sized systems in the absence of an applied dissipative field, all other thermostats ($\mu=1$) perform work on the system in the same manner as a dissipative field while simultaneously removing the dissipative heat so generated. All other thermostats ($\mu=1$) are thus auto-dissipative. Among all $\mu$-thermostats, only the $\mu=1$ Gaussian thermostat permits an equilibrium state.Comment: 27 pages including 10 figures; submitted for publication Journal of Chemical Physic

Note on the Kaplan-Yorke dimension and linear transport coefficients

A number of relations between the Kaplan-Yorke dimension, phase space contraction, transport coefficients and the maximal Lyapunov exponents are given for dissipative thermostatted systems, subject to a small external field in a nonequilibrium stationary state. A condition for the extensivity of phase space dimension reduction is given. A new expression for the transport coefficients in terms of the Kaplan-Yorke dimension is derived. Alternatively, the Kaplan-Yorke dimension for a dissipative macroscopic system can be expressed in terms of the transport coefficients of the system. The agreement with computer simulations for an atomic fluid at small shear rates is very good.Comment: 12 pages, 5 figures, submitted to J. Stat. Phy

No many-scallop theorem: Collective locomotion of reciprocal swimmers

To achieve propulsion at low Reynolds number, a swimmer must deform in a way that is not invariant under time-reversal symmetry; this result is known as the scallop theorem. We show here that there is no many-scallop theorem. We demonstrate that two active particles undergoing reciprocal deformations can swim collectively; moreover, polar particles also experience effective long-range interactions. These results are derived for a minimal dimers model, and generalized to more complex geometries on the basis of symmetry and scaling arguments. We explain how such cooperative locomotion can be realized experimentally by shaking a collection of soft particles with a homogeneous external field

Enhanced heat transport by turbulent two-phase Rayleigh-B\'enard convection

We report measurements of turbulent heat-transport in samples of ethane (C$_2$H$_6$) heated from below while the applied temperature difference $\Delta T$ straddled the liquid-vapor co-existance curve $T_\phi(P)$. When the sample top temperature $T_t$ decreased below $T_\phi$, droplet condensation occurred and the latent heat of vaporization $H$ provided an additional heat-transport mechanism.The effective conductivity $\lambda_{eff}$ increased linearly with decreasing $T_t$, and reached a maximum value $\lambda_{eff}^*$ that was an order of magnitude larger than the single-phase $\lambda_{eff}$. As $P$ approached the critical pressure, $\lambda_{eff}^*$ increased dramatically even though $H$ vanished. We attribute this phenomenon to an enhanced droplet-nucleation rate as the critical point is approached.Comment: 4 gages, 6 figure

A Way to Dynamically Overcome the Cosmological Constant Problem

The Cosmological Constant problem can be solved once we require that the full standard Einstein Hilbert lagrangian, gravity plus matter, is multiplied by a total derivative. We analyze such a picture writing the total derivative as the covariant gradient of a new vector field (b_mu). The dynamics of this b_mu field can play a key role in the explanation of the present cosmological acceleration of the Universe.Comment: 5 page

Density-matrix functionals for pairing in mesoscopic superconductors

A functional theory based on single-particle occupation numbers is developed for pairing. This functional, that generalizes the BCS approach, directly incorporates corrections due to particle number conservation. The functional is benchmarked with the pairing Hamiltonian and reproduces perfectly the energy for any particle number and coupling.Comment: 4 pages, 4 figures, revised versio