Mergers & Acquisitions

What is an Acquisition?

An acquisition occurs when one company purchases another company, including assuming the company’s liabilities and receiving the company’s assets. Most acquisitions are structured in one of two ways.

A company can acquire another company by purchasing all the company’s shares of stock. However, if the company desires to purchase all publicly traded shares of stock of another company, that company must issue a tender offer. A tender offer requires the purchasing company to publicly solicit the shares of the other company for a specific price.

A company may purchase the assets of another company through an asset purchase. The purchasing company can purchase some or all the assets of another business as negotiated between the two companies. In some cases, some of the company’s liabilities may be assumed by the purchasing company as part of an asset purchase.

What is a Merger?

Any business, regardless of the size of the business, can merge with another business. Mergers are not reserved for large corporations or multinational companies. A merger can occur when two companies decide to combine; however, more than two companies can merge to form one company. The difference between a merger and an acquisition is that a new business is created that receives all assets of the merging companies and assumes all liabilities of the merging businesses.

Do I Need a Business Lawyer for Mergers and Acquisitions?

Purchasing or acquiring a company through a merger sounds simple enough. It is just like another other business transaction in which you sell or purchase assets. However, this view of mergers and acquisitions is a simplistic view that can create problems in the future for both companies. Without a legal strategy and sound business planning, you could make a poor investment, lose money, and even face state and federal fines.

State and federal agencies regulate business acquisitions and mergers. For instance, the Federal Trade Commission (FTC) reviews business transactions to ensure they comply with the antitrust laws and the fair compensation laws of the Sherman Antitrust Act of 1890. In addition, the Securities and Exchange Commission (SEC) identifies and investigates allegations of insider trading. The SEC also reviews M&A transactions to ensure that companies are being purchased legally and that all asset and stock transfers are correctly valued.

Additionally, mergers and acquisitions involve a considerable amount of legal documentation to transfer business assets and liabilities. Examples of just a few of the legal documents involved in an M&A transaction include liability releases, deeds, asset agreements, confidentiality agreements, letters of intent, non-compete agreements, and closing transaction agreements. Furthermore, M&A transactions usually involve intense negotiations before the legal documents are drafted.

Business attorneys play a vital role in the process of merging businesses or acquiring business interests. Whenever you have a complex business-related transaction, it is prudent to seek the advice of a skilled business attorney.

Issues Involved in Mergers & Acquisitions

A mergers and acquisitions attorney handles all matters related to mergers and acquisitions by providing tailored plans based on your needs and goals. Thienel Law handles all issues that arise in an M&A transaction, including but not limited to:

• Identifying the legal issues related to the type of business industry and transaction under consideration

• Ascertaining your goals and business objectives

• Handling matters related to the transfer of intellectual property

• Evaluating issues pertaining to taxes, including the tax implications for the business and owners

• Reviewing any environmental impact issues that could become potential factors in the merger or acquisition

• Transferring title to real estate, including performing title searches to ensure that the company owns clear title to the property before the M&A

• Obtaining third party approval, consent, or releases from contractual parties or lenders

• Developing a plan to ensure that benefits and employment issues are addressed, including changing, combining, or eliminating employee benefit plans when necessary and complying with ERISA requirements

• Reviewing any regulatory rules and laws to ensure that both companies, and the new company in a merger, complies with all federal and state regulations, including reviews for antitrust issues and obtaining regulatory approval

• Preparing and filing all necessary legal documents, including public announcements, to complete the transaction

M&A attorney Steve Thienel serves as a legal advisor to help you understand the benefits and risks of acquiring a company or merging with another company. Take advantage of his decades of experience to help you grow and expand your business through calculated mergers and acquisitions.

Experience You Can Trust

If an M&A is not managed correctly, it can increase your risk for future problems, including costly and time-consuming litigation. Experienced business attorney, Steve Thienel anticipates potential risks so that you can take preemptive steps to avoid problems from developing during or after the transaction.

When you merge existing businesses or acquire another business, you need experienced legal counsel throughout the entire process, including pre-transaction and negotiation phases through structuring the M&A transaction, financing, and closing. In addition, it helps to have a law firm that can also assist you with other business issues, including taxation, employment, compliance, and other post-closing issues.

Skilled M&A attorney Steve Thienel can assist you and your company with any acquisition or merger in Virginia, Maryland, and Washington DC. Your company’s success is his primary objective. Contact Thienel Law today to learn how you can minimize risk and maximize success in your next M&A transaction.