Mergers & Acquisitions (M&A)

Mergers and acquisitions are a key growth strategy for companies of all sizes. These complex transactions not only require significant business and financial expertise, but also require legal guidance to ensure compliance to avoid regulatory interference in the transactions. During many mergers and acquisitions several different entities and stakeholders benefit from legal counsel:

  • Acquiring company
  • Target company
  • Boards of directors
  • Select committees
  • Investment bankers
  • Majority interest shareholders
  • Minority interest shareholders
  • Dissident shareholders
  • Partnership interests
  • Financial advisors

Because each group has its own interests, rights, and duties, each group needs its own set of independent merger and acquisition attorneys. In some instances the job of the attorneys is try and make the transaction go as smoothly and quickly as possible. In other situations attorneys are brought in to use the legal system to derail a deal that is unfair or undesirable to a particular group.

Many times lawyers are simply retained to ensure compliance and to protect against potential allegations of wrongdoing.

Image Merger and Acquisition paperwork

Acquisition Side

On the acquisition side of a merger or acquisition, lawyers work to help a company close the deal, while also meeting all of the different state and federal regulatory hurdle, including SEC filings.

They also help make sure that the transaction meets all tax and accounting requirements.

Lawyers will help draft and negotiate documents such as letters of engagement, confidentiality agreements, as well as the actual terms of the underlying transaction or transactions to complete the merger or acquisition.

Lawyers may also be needed to help fend off objections from a group of the acquiring company shareholders.

Target Side

Attorneys working on behalf of companies who are the target of a merger or acquisition deal often perform many of the same functions as lawyers on the acquisition side. They can help make sure the transaction clears all of the state and federal regulatory hurdles and work to get the transaction completed.

However, they may also have other duties. Attorneys can advise on the fairness of the proposed deal. They may also have to deal with groups of shareholders that either support or reject the decisions of the board of directors to accept or reject a deal.

Attorneys will also help advise target companies of the advantages and disadvantages of different stock and asset transactions. They may also discuss alternative strategies.

Shareholders

Private and public companies must both ultimately answer to their shareholders. Sometimes groups of shareholders may feel that a proposed merger or acquisition is not in their best interest and that management has a conflict of interest or are is violating its duty to the shareholders.

Merger and acquisition lawyers may be called in to advise a group of shareholders on their rights and to devise a legal strategy to stop the harmful transaction.

The options for the shareholders will be different depending on if they are in the majority or the minority. Private companies may also have several different classes of investors with different voting rights.

When a large, or particularly vocal, group of shareholders disagree with a key management decision relating to a merger or acquisition, the board may hire lawyers to negotiate with the shareholders or to defend the actions of the board in court or to state and federal regulators.

Mergers and acquisitions may appear to only be a deal between two different entities in the surface. But, the reality is much more complicated. Different participants and stakeholders have different interests. Merger and acquisition attorneys work hard to protect the rights of their clients and advance their agenda through negotiation and the legal system.

Whether you are on the “acquisition” side or the “target” side of a Mergers and Acquisitions process our attorneys have the experience to assist in structuring and negotiating the deal as-well-as provide strategic advice throughout the process and make you aware of your legal rights and obligations.

When you talk about Mergers and Acquisitions, or M&A for short, you are essentially talking about two divergent strategies used to purchase a company. We’re not talking about an individual or a small business buying or selling a company. M&A usually, but not always, involves larger corporations. A “Merger”, in this context, refers to a blending of two or more companies to create a new company. An “Acquisition” is when one company acquires another company but the acquired company remains independent and retains its own identity.

Mergers are often referred to as “friendly takeovers;” whereas acquisitions are often referred to as “hostile takeovers.” With a Merger the acquiring company’s and the target company’s board, management, and shareholders approve of the transaction. It’s a “friendly” transaction. Everyone agrees that it is in the best interests of both companies. In an Acquisition the acquiring company “acquires” control of the company; usually by purchasing a majority of the outstanding stock. The target company usually does not want to be purchased by the acquiring company. In this case the target company is said to be “hostile” to the transaction.

There are a lot of different motivations behind a company’s decision to merge or acquire another company. Most often the reasons are strategic in nature. The motivation could be that the companies fit together in such a way that their combined operations are more efficient. Maybe the target company has undervalued assets. Or, perhaps the combination just makes financial sense. Sometimes the motivation is not related to either the acquiring company or the target company but the market itself – a rash of mergers in the market places the acquiring company at a distinct disadvantage unless a strategic partner is found.

How We Can Help You

Merger and Acquisition transactions are, by their very nature, complex. They require experience and expertise in both laws pertaining to corporate governance as-well-as securities law. At Walsh Banks law our attorneys can provide legal guidance, negotiate the deal and draft the necessary documentation.

Are you considering a M & A deal? We have the experience and expertise you need.

Call (407) 259-2426
Or

Downtown Orlando Office

790 N. Orange Ave
Orlando, FL 32801
Phone: (407) 259-2426
Toll Free: (866) 801-2636
Fax: (407) 391-3626

Metrowest Orlando Office

7065 Westpointe Blvd., Ste 311
Orlando, FL 32825
Email: contact@walshbanks.com

About

Walsh Banks Law is a boutique law firm located in Orlando, Florida. We specialize in business law, real estate law and commercial litigation.