For some businesses, they reach a point where it makes economic sense to join with another business for the benefit of all parties involved.
Businesses of all sizes partake in mergers and acquisitions by either joining together with another company or by agreeing to join under the umbrella of a larger corporation.
At BrewerLong, we understand the complex and complicated nature of mergers and acquisitions in Florida and help businesses of all sizes manage mergers and acquisitions as effectively and efficiently as possible.
Our corporate mergers and acquisitions attorneys have the knowledge and skill set to provide your company with thoughtful legal advice, negotiate the most advantageous terms, and successfully represent your business best interests throughout the process.
Call or contact our office today to learn more about our mergers and acquisitions services.
What is a Merger?
A merger is the combination of two or more businesses into a new single company. There are five types of mergers that your company may choose to utilize: conglomerate, horizontal, vertical, product extension, and market extension mergers.
A merger can be one of equals or with a designated acquiring company. In an equal merger, the combined companies will have equal or close to equal board representation and shareholders surrender their shares in exchange for shares in the new company.
In an unequal merger with a designated acquiring company, one company’s representation in board management, c-suite executives, and all other aspects of the business usually significantly outweighs the other.
What is an Acquisition?
An acquisition is the purchase of one target company by an acquiring company. Acquisitions can happen in a number of ways, either through the purchase of stock or equity interests in the target company, or through the purchase of the majority of the target company’s assets.
In a stock purchase acquisition, the acquiring company purchases shares from the target company’s stockholders and assumes all of the target company’s assets and liabilities. This type of acquisition can be lengthy and complex, especially if there are a large number of stockholders in the target company.
In an asset acquisition, the acquiring company buys some or all of the target company’s assets, which can include equipment, vehicles, stock, inventory, and facilities. The acquiring company chooses which assets and liabilities to take.
Considerations for Mergers and Acquisitions
Mergers and acquisitions require a significant amount of strategic business planning and legal counsel. At the law office of BrewerLong, our mergers and acquisitions attorneys are prepared to navigate our business clients through this complex process.
Some of the most important legal considerations in a merger or acquisition include the following:
In any type of merger or acquisition, all companies involved in the transaction are required to perform due diligence. For the seller, this means taking all necessary steps to maximize the value of the company for its shareholders or equity holders and closing the deal.
This includes the preparation of extensive documentation about every aspect of the business, including but not limited to:
- corporate governance structures,
- assets and liabilities,
- capitalization schedules,
- tax information,
- operating information,
- customer and vendor information,
- personnel and labor relation documentation,
- payroll and benefits,
- intellectual property,
- research and development,
- contractual right and obligations,
- and any other information deemed relevant for the deal.
The buyer must then review and analyze the documents to determine whether it supports the deal or has any issues that must be resolved before moving forward.
Corporate governance refers to all documentation regarding its incorporation, bylaws, minutes, shareholder materials, board member information, locations where it does business, previous deals, corporate reorganizations, organizational charts, policies and procedures, press releases, codes of conduct, and more.
The seller is required to release all of this information to the buyer in a timely manner, and an experienced attorney can help collect and prepare all of the necessary documentation.
Federal law requires that mergers and acquisitions of a certain size and that affect a certain level of commerce be reviewed by governmental agencies to prevent monopolies and other types of anti-competitive environments.
Many mergers and acquisition agreements actually have terms that dictate how the companies will work together during these reviews. A lawyer can help negotiate the terms of an antitrust review to ensure that the deal does not fall apart during this process.
The tax implications and considerations of a merger or acquisition cannot be overstated for many of these deals. Both buyer and seller companies can be significantly affected by the tax considerations and how the deal is structured.
Attorneys should be intimately involved in this aspect of a merger or acquisition to provide the most advantageous tax-preferred structure and avoid unnecessary taxation on the businesses during and after the completion of the deal.
Talk to a BrewerLong Attorney Today
At BrewerLong, our mergers and acquisitions attorneys are prepared to help businesses on either side of these complex and complicated business transactions.
Contact us today to schedule an appointment to speak with one of our knowledgeable attorneys today about your case and discuss your legal options in a merger or acquisition in Florida.