- A transaction to sell a business to an investment fund or other financial buyer, or a purchaser in a related industry (a strategic buyer), is one of the most significant transactions a company may face and one which is outside its normal business activities. Early issues that arise include:
- How has the purchase price been determined?
- How will the purchase price received by the seller be treated for tax purposes, at lower capital gains rates or higher ordinary income rates?
- How do you structure payments where payment of part of the purchase price is dependent on future performance (an earnout)?
- What recourse will the buyers have against the seller after the closing, and is such liability capped?
- If the sellers continue as employees of the buyer, what happens if the buyer is later sold (a change of control) or the employee is terminated?
- We assist sellers in considering these and many other issues in the structuring, negotiating, and closing of the acquisition transaction.
- We also assist strategic and other buyers in acquisition transactions, dealing with the structure of the transaction, due diligence, liability, employment, and issues of particular importance to the buyer and its industry.
- We sometimes represent the management team separately in the transaction, addressing issues of importance to management such as employment agreements, compensation, restrictive covenants, and tax issues.
- In today’s increasingly global business environment, business often functions across borders. The buyer and the seller may be located in different countries, or one of the parties may have operations in different countries.
- International M&A transactions (or cross-border M&A) raise a host of issues and complications:
- Cultural differences in the approach to managing the company, employees, compensation, stock options, or even the manner of communicating
- Foreign regulatory requirements (e.g. antitrust) may be different to US regulatory requirements, or the deal may be subject to review by the Committee on Foreign Investment in the United States (“CFIUS”).
- Choice of law considerations
- Understanding non-US intellectual property law
- We assist sellers and buyers in cross-border M&A transactions to identify these issues early on, assess their impact on the deal, and make sure that appropriate advisers are engaged where required.
- As a boutique M&A firm, we bring the large law firm experience to deliver quality legal services in a cost-effective manner to the middle market.
- We also access, when requested by clients, our network of boutique firms with attorneys with similar large law firm experience in tax, employment, intellectual property, and other areas, as the transaction requires.
- The result is a team of highly experienced attorneys that can deliver results in a more cost-effective manner than other much larger law firms that is often well-suited to middle market (and lower middle market) transactions.
Our M&A activity encompasses transactions of varying sizes in the middle market, and typically covers manufacturing, healthcare, technology, software, consumer, and transportation industries.