Merger and acquisitions (M&A) are complex transactions that allow two businesses to combine to increase profits, reduce costs, and expand into new markets. Although these transactions can bring about opportunities for growth, they are not without risks. SederLaw’s M&A practice works closely with senior management to provide comprehensive legal guidance at each step of the M&A process. We represent both buyers and sellers to develop well-structured deals that take contingencies into account while protecting their interests.
Serving All Types Of Businesses
SederLaw counsels buyers and sellers in M&A transactions of all sizes. That includes private equity firms, investors, brokers, and other deal sponsors. Our clients include manufacturers, retailers, distributors, developers, publicly-traded and private companies, and many others. We have worked in areas as diverse as finance, technology, software, biotechnology and life science, healthcare, and more.
Mergers and acquisitions are relatively complicated matters that require input from different practice areas. SederLaw has experience in tax, banking, employment, intellectual property, and related disciplines. We understand the unique issues that face our clients and are prepared to come up with the solutions they need.
No matter the size or scope of your M&A transaction or your position in the deal, there’s no situation too complex or simple for us to handle. We serve our clients with the highest professional standards, drawing upon our extensive legal and business backgrounds.
Options For Merger & Acquisitions
A merger takes place when two existing businesses join to form a new one. This effectively dissolves the businesses as their separate ownership and operation cease. The corporate stock of the two companies is surrendered and the new company begins to issue its own stock.
In most mergers, the boards and management of the buyer and seller companies agree to merge. They discuss and negotiate terms during this initial phase. The two companies’ shareholders will later need to formally approve the merger, although the respective boards and management usually endorse the deal.
The tender offer is an alternative method of accomplishing a merger. One company seeking to acquire another will bypass management and the board of directors by making an offer directly to the shareholders. A hostile takeover is one form that the tender offer could take.
There are different ways to structure a merger, depending on how the two businesses are related to each other. They include:
- Horizontal: two companies competing in the same market with similar products or services
- Vertical: two companies in the same industry but providing goods or services at different stages of production
- Congeneric: two companies in the same industry but producing different products
- Conglomeration: two different and often unrelated businesses that combine into one
An acquisition happens when one company purchases another. These are common transactions in business that are usually structured in one of two ways:
- Asset purchase. The buying company purchases the other company’s assets, such as machinery, land, inventory, or intellectual property.
- Stock purchase. The buying company purchases the other company’s stocks, transferring ownership interest.
Acquisitions accomplish many of the same goals that mergers do. One additional reason that one company may want to acquire another is to purchase that company’s technology or research. This can save substantial time and money that the acquiring company may otherwise have needed to invest on its own.
How Merger And Acquisitions Are Carried Out
The first step of an M&A transaction is for one company to contact the other to gauge its interest in a possible deal. Assuming these initial discussions go well, the purchasing company will request detailed information from the target company to determine its value.
The acquiring company may request additional information as negotiations enter a more formal stage. At some point, the purchaser can make an offer to the target. Once the initial offer is conveyed, the companies can talk about it in more detail.
Due diligence is the next step. The acquiring company will carefully examine the target company to determine whether its initial valuations were correct. Due diligence can either confirm or modify those valuations as most aspects of the target company are closely inspected, including assets, liabilities, financial reports, and more.
Once due diligence is completed, the method of purchase is settled and a contract is drawn up. The details of the purchase and sale are finalized, the deal closes, and additional steps are taken to complete the process of joining the two companies into one.
How SederLaw Can Meet Your M&A Needs
Because there are so many parts of a merger or acquisition, there are plenty of chances for mistakes. Protecting your best interests and ensuring legal and regulatory compliance requires the help of a knowledgeable M&A attorney. We assist with these and other steps:
- Due diligence. Whether you are the purchasing company or the target company, we will guide due diligence so you can receive fair value for the deal.
- Legal paperwork. We prepare everything from letters of intent and confidentiality agreements to intellectual property transfers and the purchase and sale contract.
- Title transfers. Title to equipment, real estate, and other assets must be transferred to the new or acquiring entity, and a comprehensive title search must be conducted and reviewed.
- Contractual issues. Certain parties may need to approve various steps of the deal or release your company from ongoing contractual obligations, and we can help clear these obstacles.
- Negotiations. Whether you’re the purchasing or the target company, we negotiate to achieve the best possible deal with your interests and goals in mind.
- Compliance. The M&A process implicates a number of different state and federal laws, and we help ensure the deal is cleared from a legal and regulatory standpoint.
Contact Our Merger And Acquisitions Attorney
SederLaw’s dedicated M&A practice group has the experience it takes to successfully complete your merger or acquisition while safeguarding what matters most to your organization. To get started or to learn more, contact us today.