Improve Your Chances of a Successful Transaction
Our mergers and acquisitions lawyers will guide you through a successful transaction. We counsel business clients throughout the Philadelphia region, including Philadelphia, Bucks, Delaware, and Montgomery Counties, Pennsylvania.
M&A Transactions Bring Unique Challenges
Entering into a merger, sale or acquisition requires significant planning and strategy. Our attorneys have the experience and expertise to guide our clients through all phases of the transaction – pre-agreement, negotiating the agreement, conducting due diligence. Mergers and acquisitions are complex transactions and we can help you navigate all of the moving parts.
Our merger lawyers are familiar with the potential concerns and can help sort through them to make your vision a reality. Our attorneys work with companies of all sizes in Philadelphia and support businesses in Bucks, Delaware, and Montgomery Counties, Pennsylvania.
Types of Mergers & Acquisitions
Mergers and acquisitions refer to the consolidation of companies or assets. They include public companies and private companies. M&A activities can take multiple forms.
Mergers
A merger occurs when two companies combine, often forming a new entity, but often with one of the pre-existing entities surviving. This process typically involves the approval of both companies' boards of directors and shareholders. Companies’ owners might seek mergers to gain synergies, expand market reach, and increase competitive advantage.
Acquisitions
An acquisition is a process by which one company purchases the ownership interests in another company. The acquired company may become a subsidiary of the acquiring company or be absorbed entirely. Acquisitions can be friendly or hostile, depending on whether the target company’s management supports the transaction. Among many reasons, companies acquire others to gain new technologies, enter new markets, or achieve economies of scale.
Asset Acquisition
In an asset acquisition, a company purchases specific assets of another company rather than buying an ownership interest in the company itself. This can include machinery, patents, intellectual property, customer lists or other assets. Asset acquisitions allow the purchasing company to selectively acquire valuable assets while avoiding liabilities associated with the target company.
Management Acquisitions
Management acquisitions occur when a company's executives buy a controlling stake in the company from its owners. Financing can come from private equity firms or through personal funds and loans. Management buyout acquisitions might occur where the company’s management hopes to gain greater control over the company's operations and strategic direction.
Critical Steps in the M&A Process
As mentioned, mergers and acquisitions can be complicated. Numerous pieces must come together for a transaction to be successful. Although no two transactions are the same, an experienced High Swartz attorney will help you negotiate the following typical steps:
Valuation
Determining the value of the target company is essential. This involves examining many factors, including the company’s assets, liabilities, earnings, and market conditions.
Due Diligence
Due diligence is a critical. The acquiring company (or sometimes both companies in a merger setting) will thoroughly review the other company’s financial documents, operations, legal matters, and overall health. This step helps the acquiring company understand and identify potential risks and the overall health of the target company.
Depending on the structure of the deal, the acquiring company might have the opportunity to terminate the transaction prior to the expiration of a due diligence period, if the due diligence investigation is unsatisfactory.
Negotiation
In this stage, the parties discuss and agree on the terms of the deal, including structure (asset or entity acquisition), price, time for closing, which party bears the brunt of certain risks, indemnification, and so on. A seasoned attorney is priceless during the negotiation phase.
Contract Drafting and Review
Once the parties agree on the terms of the deal, their attorneys will draft and review the legal documents. These contracts outline the deal's specifics, including the points negotiated above, representations, warranties, and indemnities. A solid contract protects both parties and ensures clarity. A business lawyer versed in contract law is critical during this process.
Regulatory Approval
M&A deals often require approval from regulatory bodies to ensure compliance with antitrust laws and other regulations. Navigating this process is crucial to avoid legal issues that could derail the agreement.
Our M&A Lawyers Get Results
With any M&A transaction, a team of professionals will help guide you through the process. Our business and M&A lawyers will provide this guidance and help you navigate the essential steps that will ensure a successful deal.
Our acquisition attorneys support businesses in the Philadelphia area and Bucks, Delaware, and Montgomery counties. Get the insight you need to make your transaction a success.
