Legal Blog

The Nature of Business Transactions and the Importance of Exit Planning

As you may recall from our previous blog, “From Exit Planning to Acquisition: How Deals Get Done,” Offit Kurman both participated in and co-sponsored the seventh annual Baltimore Business Journal (BBJ) “Knowledge is Power” quarterly breakfast speaker series. The event took place on Friday, December 6, 2013 at the Hotel at Arundel Preserve. The BBJ welcomed four distinguished panelists, including Offit Kurman Business Law and Transactions attorney Mike Mercurio, to discuss how M & A deals happen in today’s mid size business marketplace, and especially in Cyber.. The discussion was moderated by Chris Fedde, Executive Vice President, Hexis (a KewY company). The Importance of Exit Planning “None of us has a crystal ball,” said Mercurio, who is a Principal at Offit Kurman and Chair of the Firm’s Business Law and Transactions’ Practice Group. “You need a plan for your exit, and you also have to be ready for the `now.’ If you don’t have a plan, the `now’ becomes even harder. Timing is really important. Plan – but be ready now.” In business, as in life in general, anything can happen.  . The economy tanks, clients dwindle, partners drop out, or key employees move on. This is why it is important to have a viable exit strategy in place. The one universal business truth is that as an owner, you will leave your business one day. The key is to a successful transition for owner and company is to plan so that this day happens by Choice, rather than by Chance.  And the key to making sure the timing is right is being prepared. “You don’t know when your buyer is coming,” said Mercurio. “A lot of times, a buyer comes when you’re not looking for it.” Will you be ready when the right buyer- or seller- comes calling?  If not, you could be hurting your ability to leverage the assets you possess.  The side with the most leverage is typically the side that is most prepared for the acquisition process. “The M&A process is all about leverage – buying, selling, who’s got leverage in the negotiating process,” warns Mercurio. Having legal counsel early on in the transaction process is essential. “Don’t get your attorney involved at the end as a draftsman,” said Mercurio. “Timing is important in any transaction. If your counsel is not well versed in M&A, especially in your industry, your deal could get stalled and buyers do get distracted. So from the legal side, get competent M&A counsel in as early as possible. Their job is to drive your transaction to closing.” Exit PlanningIf you have any questions related to Mergers and Acquisitions, please contact Mike Mercurio at mmercurio@offitkurman.com or 301.575.0332. Offit Kurman Attorneys at Law: Mergers and Acquisitions (M&A) Practice Group At Offit Kurman Attorneys at Law, the lawyers in our Mergers and Acquisitions (M&A) Practice Group have earned a strong reputation for handling the gamut of business combinations and sale transactions regularly faced by private enterprises with skill, expertise, and efficiency. We regularly represent mid-market companies in deals of varying size and complexity. Our comprehensive services include the sale, purchase, restructuring and consolidation of business entities and divisions, management buy-outs, exit and succession planning and joint venture transactions. To learn more about Offit Kurman’s Mergers and Acquisitions (M&A) Practice Group, please fill out our contact form to access the sound legal guidance of our experienced business law team. You can also connect with Offit Kurman via FacebookTwitterGoogle+YouTube, and LinkedIn.