Businesses are known as legal entities or “legal human beings.” Businesses grow just like every other living thing out there. In the bid to grow, these businesses pass through several stages. They exhibit some of the characteristics of living things such as; growth, reproduction, nutrition, death, and so on. For instance, when a business is “born”, it doesn’t end there, it needs “nutrition” to keep living. Some aspects of these characteristics of living things, such as reproduction, nutrition, and even death involve a process that can be likened to Merger and Acquisition. Get the help of a skilled Mergers and Acquisitions lawyer today!
Mergers And Acquisitions
Merger and Acquisition simply put is a legal process of changing the nature of a business to make it bigger, smaller or subsumed in another business. It could mean a “marriage” of two businesses while both businesses co-exist, a business swallows another business and exists as one, or a business buys up the parts of the other business that it needs and leaves it to exist in a smaller scale. Merger and Acquisition is the consolidation of synergies to improve the financial viability of each company. Merger is the legal consolidation of businesses into one whereas Acquisition occurs when one entity takes ownership of another entity’s share capital, equity interests or assets.
Importance Of Merger And Acquisition
This legal process helps businesses to boost the financial resources of the company, risks are diversified, market share can be increased, and so on. The benefits of Merger and Acquisition cannot be overemphasized; however, it is a very sensitive legal process that needs extra care. It involves strict due diligence; intensive and thorough investigation of the selling of the selling company. Therefore, it is critical to hire a knowledgeable Mergers and Acquisitions lawyer like those at Barnwell Law Group.
Stages In Merger And Acquisition
1. Initiation Stage. Drawing from our comparison between businesses and living things, Merger and Acquisition can be likened to blood transfusion. Before blood is transfused, both parties are usually thoroughly screened to ascertain if they are a “match”. This is also applicable to the Merger and Acquisition of businesses. As a buyer, there is a kind of business you will acquire and it will crumble your viable business.
When a buyer sends you a letter of intent to buy your business, do not be in a hurry to sign it. There is usually a trap in it! Yes! A trap! Letters of intent are usually taken for granted because they are believed to be “non-binding”. Hey! Don’t shy away with those terms that are not sufficiently described in that letter, terms like the non binding nature of the terms, indemnity, prices, adjustment to prices, and so on. Some letters of intent even prohibit the dealer from accepting bids from other prospective buyers.
If you have not hired a lawyer at this stage, run as much as you can to engage a good lawyer that specializes in Merger and Acquisition, or better still, engage a legal team. Don’t worry so much about the fee for a legal team, the cost of future litigation that this team will save for you should be prioritized.
Barnwell Law Group is a league of lawyers that specializes in Merger and Acquisition. They have a very beautiful combination of specialization that gives you the best services in Atlanta.
Why Should You Opt For The Barnwell Law Group?
- They are familiar with the business realities of Merger and Acquisition deals, the overall structure, and the inner workings of the acquisition agreement.
- They are abreast with the substantive laws that regulate Mergers and Acquisition in Atlanta GA.
They are skilled advisors, negotiators, and draftspersons with proven success scores and a wealth of experience. - Merger and Acquisition is a complex legal process that may require every of these services at one point or the other.
At the initiation level, Barnwell Law Group helps you to draft your protective letter of intent as the buyer or scrutinize the letter of intent sent to you as the seller. They will work with financial advisors to give you proper preliminary footings that will enable you stand a better chance in the negotiation stage. Remember, the clauses you neglect at this stage, no matter how “harmless” they appear, may affect or influence you at the negotiation stage.
2. Agreement Stage. This is the most important stage of Merger and Acquisition process. Every aspect of the Merger and Acquisition must be discussed and expressly agreed upon to avoid litigations in future. Do not assume anything! Barnwell Law Group will guide you through this crucial stage. They will analyze the circumstances surrounding the whole process and find out which of the parties that has the greater leverage. This determines the compromises that will be made and the point to put a seal.
It is important to note that the initial offers from buyers are not usually the best. Once you have the greater leverage, let the buyers make their offers, while you confidently propose slightly above the highest bidder. It is at this stage that intellectual property issues are expressly discussed and agreed upon. Don’t forget that your employees need to be protected. If possible, make a provision for Earnout.
Earnout is a contractual provision in the agreement that allows a seller to receive additional consideration in the future if the business sold achieves certain financial metrics, such as milestones in gross revenue or EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
When all the terms of the Merger and Acquisition have been agreed upon, Barnwell Law Group compliments it with a well-drafted Merger and Acquisition Agreement that shields you from risk.
3. Execution Stage. It is one thing to reach an agreement and another thing to perform the terms of the agreement completely. Barnwell Law Group ensures that the feared Intellectual property issues do not arise, that employees and their benefits are provided for, and lots more.
Protect your business and interests. Hire a trusted Mergers and Acquisitions lawyer for assistance. At Barnwell Law Group, I offer specialized legal services to help you. Schedule a free consultation!