Delaware Court of Chancery Orders Buyer to Close $2.35 Billion Acquisition After Finding Termination Invalid

In a post-trial decision, the Delaware Court of Chancery held that Verisk Analytics could not walk away from its $2.35 billion cash acquisition of AccuLynx, a cloud-based roofing business management platform. Vice Chancellor David found that Verisk’s termination of the merger agreement was invalid because Verisk’s own voluntary conduct—even though not undertaken in bad faith—was the primary cause of the regulatory failure that prevented the deal from closing on time.

The court ordered specific performance, requiring Verisk to continue performing under the merger agreement, use commercially reasonable efforts to secure FTC clearance, and close the transaction if approval is obtained.

Background

Verisk signed a merger agreement to acquire AccuLynx on July 29, 2025. Both parties believed the deal posed minimal antitrust risk—there was no horizontal competition and no vertical supplier-customer relationship between them. The merger agreement set an outside termination date of November 26, 2025, with a one-month extension to December 26.

The deal required FTC approval under the HSR Act. Before signing, Verisk had been in discussions with ServiceTitan—an AccuLynx competitor—about developing a deeper, bespoke integration with Verisk’s Xactware platform. Verisk decided before signing to end those discussions. Six days after publicly announcing the AccuLynx deal, a Verisk employee emailed ServiceTitan to formally terminate the integration discussions, explicitly citing the acquisition as the reason.

The FTC Investigation

ServiceTitan informed the FTC about Verisk’s decision. This prompted the agency to develop a novel “market reset” theory: that post-merger, Verisk might develop an exclusive pricing integration for AccuLynx, foreclosing its competitors. The FTC repeatedly asked Verisk whether it had terminated integration requests from AccuLynx competitors. Verisk’s relevant employees did not connect the dots and repeatedly said “no”—not through intentional deception, but because they failed to recognize that the ServiceTitan Enhanced Integration discussions were responsive to the FTC’s inquiries.

The FTC narrowed its theories of harm to the single market reset theory, issued a Second Request, and ultimately required full compliance rather than clearing the deal on a quick-look basis. Verisk terminated the merger agreement on December 26—the extended outside date—after spending approximately $8 million on regulatory compliance efforts.

The Court’s Analysis

“Willful Conduct” vs. “Willful Breach.” The merger agreement’s anti-termination provision barred a party from terminating when its “willful conduct” was the primary cause of a closing condition’s failure. The court interpreted this as requiring only voluntary, intentional action—not bad faith, malice, or intent to breach. Because the agreement used “willful breach” elsewhere (defined as requiring intent to breach), the court concluded that “willful conduct” deliberately ratchets down the mental-state requirement. Even well-intentioned, non-wrongful conduct can trigger the bar on termination.

Primary Cause. The court found that the August 5 termination email was the primary cause of the FTC’s Second Request. Verisk’s own regulatory expert—a former FTC Bureau of Competition Director—testified that the email was the reason the FTC needed to investigate. ServiceTitan was the only competitor that had multiple FTC calls, was subpoenaed, and was engaged by the agency on critical dates. All four initial theories of harm collapsed into the single market reset theory driven by that one email.

No Bad Faith Required. Critically, the court found virtually no evidence that Verisk intended to torpedo the deal. Verisk genuinely wanted the acquisition and devoted substantial resources to obtaining FTC clearance. But under the “willful conduct” standard, good intentions were irrelevant.

Remedy

The court ordered specific performance: Verisk must continue performing under the merger agreement, pursue FTC clearance with commercially reasonable efforts, and consummate the acquisition if the FTC approves. The court also awarded $3.85 million in direct costs plus prejudgment interest. In reaching this result, the court emphasized that the parties had contractually stipulated to the availability of specific performance, and rejected Verisk’s arguments that damages would be adequate or that judicial oversight would prove unworkable.

Key Takeaways

“Willful conduct” and “willful breach” are not synonymous. Where a merger agreement uses both terms, courts will interpret “willful conduct” as requiring a lower mental state—voluntary and intentional action, not bad faith or intent to breach. Buyers should understand that even well-intentioned, non-wrongful conduct can bar termination under such provisions.

Pre-closing commercial decisions can carry outsized regulatory consequences. Verisk’s decision to end integration discussions with a target competitor—made before signing—triggered the entire FTC investigation theory. Parties must carefully evaluate how commercial decisions involving the target’s competitors may be perceived by antitrust regulators.

The “primary cause” standard is meaningful but meetable. While higher than a “material contribution” standard, it can still be satisfied where a single action serves as the catalyst for an adverse regulatory outcome. 

Inadvertent disclosure failures compound regulatory risk. Even though Verisk’s failure to disclose the ServiceTitan situation was unintentional, it deepened the FTC’s suspicions. Companies should implement robust internal processes to ensure complete and accurate responses to regulatory inquiries.

Specific performance remains a powerful tool in Delaware M&A. Contractual specific performance provisions carry weight. The court ordered Verisk to continue performing and close if approval is obtained, consistent with Delaware’s tradition of enforcing merger agreements as written.

Outside dates are not escape hatches. Even with a clear termination date, a buyer cannot walk away if its own conduct—even non-wrongful conduct—was the primary reason the deal could not close on time. Reverse termination fee structures do not provide a free exit when the buyer’s own actions caused the delay.