As St. Patrick’s Day was celebrated, it reminded me of an old Irish proverb, “lie down with dogs and you’ll rise with fleas”. That proverb certainly applies to mergers and acquisitions, as buyers need to be on the lookout for warning signs, or skeletons in the closet, of their targets. A few items that should spark concern include high turnover at certain positions, an unusual number of worker’s compensation claims, the seller’s inability to provide detailed financial information, family relationships between the seller and its vendors or suppliers, and unusually long aging of accounts receivable. While all of these items, if known, can be dealt with through contract negotiations and implementing change post-acquisition, if these items are not uncovered prior to a sale they could come back to bite the purchaser and interfere with the success of the merger post-closing.
ABOUT GLENN D. SOLOMON
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Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 150 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our ten offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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