In every business, growth happens organically (DIY) or strategically (buy, sell, or joint venture with others). Strategic growth is attractive because it takes less time than organic growth. It is also appealing because it may seem to require less investment of time and money. However, navigating the tax, legal, and business elements of the deal can be challenging, and many times surprises put you and your business at a disadvantage.
People often use the terms joint venture, merger, and acquisition to refer to many different types of transactions. However, the tax effects and business results of these terms can be drastically different:
- An acquisition typically means the purchase or sale of the stock or assets of a business.
- A merger occurs when one business entity “merges” into another business entity and, in essence, is absorbed by the “surviving” business entity.
- A joint venture can involve mergers, acquisitions, or the creation of new jointly owned businesses. The businesses involved in a joint venture typically remain separate except with regard to the line of business to be conducted jointly.
Our skilled team of professionals has extensive experience and a proven record in executing successful mergers and acquisitions and offers strategic advice tailored to your business requirements.
We understand that your time is valuable. Therefore, we provide you with the knowledge and support throughout the deal life cycle, a process that requires careful attention to the tax and legal implications surrounding your transaction. We educate our clients about the realities of the process so they can plan for what will happen.
Whether your concerns stem from regulatory compliance, valuation, or integration post-acquisition, our seasoned professionals can efficiently navigate these complexities to ensure a smooth transaction.
Our services encompass every aspect of the transaction, including:
- Letters of intent
- Negotiation of the transaction
- Purchase and sale agreements
- Employment and non-compete contracts
- Non-disclosure agreements for use during the due diligence process
- Closing documents
- Restructuring and Recapitalization
Many times, our clients need to obtain additional capital for the growth of their businesses or otherwise need to address their organizational structure for tax and other reasons. We routinely assist in the restructuring of businesses for equity investment on a minority or majority ownership basis, for subordinated and convertible debt, and for senior and other structured debt.
Our clients include management teams, private equity groups, entrepreneurs, and other strategic and financial buyers, as well as owners desiring to sell all or part of their business. Additionally, we represent a broad spectrum of industries, including IT, manufacturing, professional services, construction, to distribution companies, to name a few.
Representative Transactions
- Sale of a software development firm to private equity group
- Sale of industrial equipment and parts manufacturer to a strategic purchaser
- Restructure and exit planning for a durable medical equipment company
- Sale of data infrastructure, data security and managed services firm to a strategic purchaser
- Purchase of distressed manufacturing operations by a strategic buyer
- Sale of third-party insurance administrator to private equity group
- Sale of utility/data subcontractor to management and private equity group
- Purchase of U.S. subsidiary of German company engaged in manufacturing
- Sale and purchase of single and multiple location franchisees in various industries
- Organization and restructure of U.S. and Canadian operations of U.S. based manufacturing and distribution company
- Restructure and Sale of multiple locations and multi-state transportation fleet servicing operation while retaining ownership of real property site of operations
- Sell-side merger representation of business services company, a manufacturing company, packaging company, insurance agency, alloy manufacturer, event planning and consulting company, and distribution company.
FAQs
A Letter of Intent includes all business points which are “deal breakers” for the parties. It’s the quickest way to see if the buyer and seller agree on the deal’s major terms. Without it, the buyer and seller can waste time and money just to find out later they don’t have a deal.
Ideally, you will start at least five years in advance. That gives you time to plan for taxes, fix problems, increase value, and pick the right time to sell. The less time you have, the less you will be paid for your business. (Also, what makes your business more valuable to a buyer will make it more valuable to you while you own it.)
There are two reasons. First, you need to know that you are getting the deal you think you are getting. Second, you need to know if you’re going to have to give money back after closing. You need an experienced attorney to help you understand what you are getting and what you have to lose.
The answer depends on what motivates those employees. It also depends on what they think business ownership means. Once employees understand the obligations of ownership, they may want just a cash incentive instead. Also, once you understand the obligations you have to additional owners in the business, you may want to provide a cash incentive instead.
