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Mergers and Acquisitions: The Anatomy of a Transaction from the Sell Side

Mergers and AcquisitionsIn a merger or acquisition, there are two key players, the buyer (acquiring party) and the seller (party being acquired), although there are several additional parties involved, including the financial planner, accountant, mergers and acquisitions (M&A) consultant, and attorney. Each plays an important role in the process. However, in this article we will only be focusing on one key player, the seller. Unlike the buyer, who has most likely been through this process several times before, the seller is typically new to the transaction process. And while both parties must prepare extensively to close the deal, the seller’s preparations are part sale/part exit strategy, sometimes a more difficult scenario than the buyer faces. The Anatomy of a Transaction from the Sell Side The attorney, along with the buyer and seller, appear in each of the following phases:

  1. Pre-Transaction Planning: Assisted by the M&A consultant and accountant, the seller and their attorney prepare for the upcoming transaction.
  2. Letter of Intent: The attorney meticulously puts the seller’s intents into writing.
  3. Due Diligence: Disclosure provides the transparency necessary to move the process forward.
  4. Contracts: The buyer, seller and their attorneys work out the intricate details.
  5. Closing: The deal becomes final.
  6. Post-Closing: Make sure all of the t’s are crossed and I’s are dotted. Even though the transaction has closed, unforeseen factors could still undo the deal.
  7. Post-Transaction Planning: As a seller, it is time to adjust to your new status in life.

A Little Advice for the Seller

  1. Remember, as a seller, you have not sold your business until you have sold your business. Until the business is actually sold, all the promises made by both parties are moot.
  2.  Make sure you get your money upfront. Back-end deals benefit only the buyer and often leave the seller in limbo.
  3. Do your best to reduce or eliminate your training liabilities. This helps to mitigate the buyer’s concerns and expedite payment to the seller.
  4. Because an acquisition or merger is as much a legal as a financial transaction, the quality of legal representation is significant for achieving a successful outcome. Make sure you have an experienced business transactions attorney in your corner, like the ones at Offit Kurman Attorneys at Law. From pre-transaction planning, through the letter of intent, due diligence, document drafting, and closing, Offit Kurman is committed to meeting and exceeding your expectations. We have been specializing in mergers and acquisitions for buyers and sellers since 1987. We understand all facets of the M&A process and are fully committed to working with clients to achieve their long- and short-term objectives.

Mergers and AcquisitionsIf you have questions about Mergers and Aquisitions, please contact Offit Kurman business law attorney and Chair of the firm’s Business Transactions Practice Group Michael N. Mercurio at (301) 575-0333 or Mr. Mercurio has significant experience assisting clients through growth and maturation issues as well as mergers and acquisition matters (buy side and sell side). His practice focuses on providing comprehensive legal advice to clients in diverse industries, including IT, Government Contracting, Construction, and Healthcare.   Offit Kurman Attorneys at Law: Mergers and Acquisitions (M&A) Practice Group At Offit Kurman Attorneys at Law, the attorneys in our Mergers and Acquisitions (M&A) Practice Group have earned a strong reputation for handling the gamut of business combinations and sale transactions, including the sale, purchase, restructuring and consolidation of business entities and divisions, management buy outs, exit and succession planning and joint venture transactions. Our attorneys have the experience to work through any one of the many issues that can arise during an M&A transaction and close the deal on terms that are most favorable to you, our clients. If you would like to learn more about Offit Kurman’s Mergers and Acquisitions (M&A) Practice Group to see what we can do for you, please fill out our contact form to access the knowledgeable legal guidance that our experienced business law team of attorneys has to offer. You can also connect with Offit Kurman via FacebookTwitterGoogle+YouTube, and LinkedIn.