When your company reaches a certain level of success, it’s time to consider the next strategic move. Mergers and Acquisitions (M&A) have a lot of benefits and can really push your business to the next level. In order to reap the benefits, however, you have to navigate all of the legal and regulatory complexities carefully. Your attorney will be a powerful asset in the planning process by assisting with legal guidance and appropriate due diligence for a smooth M&A transaction.
Structuring and Negotiating
M&As require a lot of legal considerations including contract negotiations, tax implications, regulatory compliance, and determining potential liabilities. As an entrepreneur, you probably have strong negotiation skills, but your attorney will understand the legal nuances of drafting and negotiating complex agreements to make sure that your best interests are protected. It’s possible to do a lot of the leg work on your own, but it can be overwhelming, especially if you’re also managing the day-to-day operations of your business. An attorney experienced in M&A transactions can take off some of the pressure by guiding you in selecting the most advantageous deal structure or negotiating more favorable terms that better align with your goals.
Comprehensive Due Diligence
The best way to make sure negotiations go well is to have all the necessary information. Due diligence is one of the most important aspects of an M&A transaction. The information collected during due diligence can make or break a deal and the implications of signing contracts without knowing all of the facts can be financially and legally devastating. The other party may not intentionally be attempting to hide anything, but your attorney can also foster greater transparency when necessary. Your attorney can help conduct a thorough review of the target company’s financial records, existing contracts, intellectual property, and potential liabilities. Their combined experience and training will enable them to point out red flags or less obvious risks. In an M&A transaction, knowledge is power, and your attorney wants to help you harness it.
Protecting Your Best Interests
Unfortunately, not all deals are going to go through. Sometimes what seems like a good deal will end up being a lot more trouble than it’s worth after gathering all of the information. After doing all of the heavy lifting of performing appropriate due diligence and extensive negotiations, it can be hard to walk away feeling empty-handed. However, it’s often better to walk away and start over than to take on issues like IP disputes or compliance issues. As appealing as it might sound, a good attorney is going to have an outside view of the situation and will make an effort to explain whether it’s a good idea to move forward or not. An M&A should be an opportunity for growth, not a hindrance. Even if you’re not fully ready to walk away, your attorney will help weigh the pros and cons while coming up with strategies to mitigate risks like addressing regulatory concerns or protecting your assets from potential liabilities.
M&A transactions are subject to constantly changing regulations. Regulations can make or break a business model virtually overnight. Compliance at every stage of the process is important to avoid legal complications. Although an M&A transaction can take a lot of time and resources, it’s a significant milestone with many benefits for any business. The team at the office of Carla D. Aikens, P.L.C. is dedicated to protecting your interests and guiding you through every step of the process. If you’re considering an M&A and want to know where to start, or if you have your sights set on a target company, call our office at (844) 835-2993.
Carla D. Aikens, P.L.C.
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