Our M&A support service covers every aspect of these complex transactions including dealing with compliance issues, securities law, finance issues, corporate structure issues, negotiating, drafting transaction documentation and facilitation the closing process. and anything else our clients need to successfully meet their business goals while limiting their legal liability risk.
The job of the M&A lawyer in a complex commercial transaction is to make sure the interests of the client are protected, to warn the client of possible dangers or risks of the transaction, and aggressively advance the interests of the client without scuttling the deal. Additionally, mergers and acquisitions attorneys will need to work with their counterparts representing other parties to satisfy regulators that the proposed transaction does not pose a risk to the marketplace.
While the obligations to the client never waver, each phase of the transaction requires different things from the M&A attorney depending on who the client is. There are often multiple threats to the successful completion of a deal. M&A lawyers must mitigate the risks of failure, resolve minor disputes quickly, and keep the pressure on everyone involved to keep the transaction moving forward.
While some people think of M&A attorneys as closers—only being brought in to help seal the deal—they are usually involved from the earliest days of a proposed merger or acquisition. Once a business has set its sights on a target its in-house legal team will retain an outside firm with M&A expertise to help advise on the potential transaction.
These outside M&A attorneys will help with the negotiations with the target company. Once a company realizes it is an acquisition target or potential merger partner, it will also retain its own M&A attorneys to help advise on the transaction and negotiate the details.
In many complex transactions there will also be a third side, the lenders or investors that will fund the merger or acquisition. This third group will also want M&A attorneys to help negotiate the structure and terms of any financing deal.
Compliance and Securities Issues
Usually the negotiation process of a merger or acquisition will be confidential and out of the public eye. But, once the basics of a deal have been reached and approved by the different boards of directors, the outlines of the deal will be made public.
During this phase, M&A lawyers will need to help get the approval of regulators that have veto authority over the deal and to resolve any securities law issues.
Companies are owned by their shareholders. When two different companies are fused together the investors in the target company must be properly compensated. Often these transactions are done with a combination of cash and stock. The M&A attorneys will need to make sure all of the stock transactions comply with state and federal law.
Sometimes a group of shareholders in one of the companies will try and fight the merger or acquisition and the M&A attorneys will have to work to resolve these shareholder revolts.
Often M&A attorneys are working on selling the transaction to regulators and shareholders in the respective companies at the same time.
Financing and Corporate Structure Issues
Simultaneously to trying to get the transaction approved by the shareholders and regulators, M&A attorneys will also be working to line up the needed financing and corporate structures for the deal to move forward.
Financing can be in the form of loans, new investment, or some combination of both. Banks and investors will want to make sure they get a solid return on their investment and may demand certain changes in the new corporate structure.
Sometimes tax considerations will make it desirable to create a new corporate entity and to wind down the two existing companies. M&A attorneys are responsible for making sure the transaction costs are kept to a minimum while also doing what is needed to secure financing and make sure the new fused organization is viable legally, financially, and from a business perspective.
M&A law requires attorneys to manage a lot of different moving parts while continuing to push the transaction forward as quickly as possible.
Drafting Closing Documents
Once the different stakeholders have been satisfied, all the disputes have been resolved, and regulators have given their approval the M&A attorneys will need to draft the closing documents that will make the transaction a legal and financial reality.
There will one master sales or merger agreement that will outline each party’s responsibilities and set the timeline for the closing process. However, there may be hundreds of different legal documents that need to be drafted and executed. These will include everything from debt assumption agreements with creditors to amended leases to consent decrees with regulators.
Because each side of the transaction has their own M&A attorneys, drafts of the agreements often are circulated and amended several times before a final set of documents is ready for authorized signatures.
Facilitating the Closing Process
The last phase of the M&A process is the closing process. Even after all of the documents are signed, there is a lot of work that can stretch out for months before two companies are turned into a single entity.
M&A lawyers monitor the closing process and make sure all of the different tasks are accomplished as set out in the final agreement. Often deadlines will be missed or new obstacles will come up.
The attorneys must creatively troubleshoot any issues to keep the transaction from going off the rails at the last minute and to make sure the new organization is as strong as possible. During this phase attorneys may be making sure the proper paperwork is completed and field with regulators, following up with lenders to make sure the financing is coming through, and dealing with any last minute legal actions from parties trying to stop the merger or acquisition at the last