Business entities are the lifeblood of commerce. As part of the natural growth and change of business, many companies merge with, acquire, or are acquired by other entities. These processes involve legal documents that are complex but necessary to ensure that the business combination will be beneficial.
If you are considering an offer or plan to combine your entity with another, you should first consult an Atlanta mergers and acquisitions lawyer at Sparks Law. Our knowledgeable attorneys can guide you through the process and help you make smart business choices to achieve your goals.
Mergers and acquisitions both consolidate assets and liabilities into one entity. Additionally, both processes can involve corporations, limited liability companies, and partnerships. However, there are key differences between mergers and acquisitions.
Mergers are structured to give shareholders from both companies a stake in owning and operating the combined company. Mergers are usually agreed upon by management from both companies to benefit their respective positions in the marketplace.
Acquisitions occur when one entity takes over another. These can be friendly or hostile; a common hostile scenario is when the acquiring party buys up the takeover candidate’s stock until they own the majority of it, despite the fact that the takeover company did not wish to be acquired. Alternatively, a small company that is stagnant because of cash flow problems may agree to be acquired for the influx of cash and operate as the parent company’s subsidiary.
Regardless of your situation, our lawyers are skilled in overseeing business combinations in Atlanta and can help structure a merger or acquisition that fits your company’s needs.
A friendly merger or acquisition usually begins with both parties discussing what the post-transaction company might look like and how it would benefit everyone involved. At this point, a lawyer would draft a Letter of Intent. This document does not yet bind the parties to go through with the deal, but it should set a time limit to perform due diligence and commit to the transaction. A Letter of Intent can also mandate that all shared information is kept confidential and forbid the parties from shopping for other merger or acquisition candidates while negotiating with each other.
The next phase is called due diligence. At this step in the process, the firms’ corporate lawyers, accountants, management, and tax advisors will delve into the other entity’s books and records to determine all vital business aspects. This involves scrutinizing extensive information about finances, shares outstanding, management, and operations.
If the parties are satisfied with due diligence, our experienced lawyers can provide an initial draft of the final contract, merger, share purchase, or asset purchase agreement. These agreements may include various provisions, such as:
It is critical to work with a skilled lawyer at our Atlanta firm when drafting merger and acquisition documents, as there may be financial consequences for any errors in the management negotiating terms.
Mergers and acquisitions, including asset purchases or stock purchases, involve complicated legal documents that are best left to experienced lawyers. Do not attempt to begin this process without legal preparation and representation.
Get an Atlanta mergers and acquisitions lawyer involved early on to advocate on your behalf throughout the entire procedure. At Sparks Law, we take the time to understand your precise goals so that we can work to help you and your business achieve them. Call our office to schedule your initial consultation today.