In merging two distinct companies there are many legal technicalities that need to be reviewed to finalize the deal, so it’s critical to hire an attorney to help cover your bases. Lawyers typically assist in drafting legal documents like the letter of intent and acquisition agreement, and even employment agreements to keep key employees at the company after the deal closes. They also assist with due diligence and negotiations and answer any legal questions you may have.
Lawyers provide guidance on deal structure so you can structure the deal to your advantage for tax and legal purposes. Although it’s not binding, a preferred deal structure – stock purchase, asset purchase, or merger – is often specified in the letter of intent, so don’t wait too long to get your tax and legal folks involved.
Although lawyers are critical to putting together a deal, don’t default to them. Lawyers are trained identify and eliminate risk, but risk is inherent to acquisition. As an acquirer, it’s your job to lead the transaction and evaluate it from a business perspective.
A few additional points about lawyers: It’s important to make sure you hire lawyers who know how to spell M&A. Don’t just hire anyone who is an attorney. In the same way that you wouldn’t go to a cardiologist for a broken foot, you shouldn’t hire a real estate attorney for an acquisition.
Learn more about legal issues in M&A. Join our webinar Contemporary Legal Issues in M&A led by M&A Attorney John McDonald of Troutman Sanders.
Date: Thursday, October 19, 2017
Time: 1:00 PM – 2:00 PM EST