There are few greater feelings in life than preparing a company you've worked for years to build for a profitable sale. On the other side of the equation, preparing to acquire a competitor or strategic partner is an exciting prospect which can take your company to new heights. 

Whether you're an emerging startup entering into negotiations for a sale, or a large scale enterprise seeking a merger or acquisition, entering into these discussions without the assistance of a specialized mergers and acquisitions (M&A) attorney is a fool hardy move. 

But at what point should you enlist the help of an M&A attorney? The answer is often earlier than you think.

At SVTech Law Advisors, we understand the complexity and unique challenges the M&A process presents for organizations on both sides of the spectrum. Without the aid of a seasoned mergers and acquisitions lawyer, there are a variety of pitfalls that can derail even the most promising of M&A opportunities. The sooner you seek M&A legal services, the more likely you'll be to experience a successful transaction, and a seamless transition.

Today we'll uncover the biggest reasons why - and when - you should retain the services of a mergers and acquisitions attorney.

What is the Role of a Mergers and Acquisitions Attorney?

First things first - what role does a mergers and acquisitions attorney play in the process, and how are they different from a traditional attorney? 

When two or more companies consider a transaction involving the sale, purchase, or merger of one or both entities, there are numerous details that require careful handling for a successful transaction to take place. 

These details include:

• Negotiating the valuation and purchase price 

• Completing confirmatory due diligence and resolving issues discovered during that process

• Negotiating and drafting the definitive agreement

• Planning for integration after the transaction 

Navigating this complex process requires advice from many experts including specialized legal guidance from a professional mergers and acquisitions attorney. These legal professionals bring a special set of skills to the table. They possess deep negotiation skills, a comprehensive understanding of various deal structures, and a seasoned eye for potential risks. 

M&A attorneys play a central role in orchestrating the essential details of the sale, helping clients navigate the transaction as efficiently and effectively as possible. 

They provide essential legal counsel throughout the lifecycle of a deal, from the earliest stages of planning and preparing for and conducting due diligence, deal structuring, negotiating and drafting the definitive agreement, and planning and preparing for integration after the closing of the transaction. 

Even when an organization has an in-house legal team, the expert guidance of an outside M&A attorney provides an essential compliment, collaborating together to ensure that all documents are legally sound and in compliance with regulations. 

They also help minimize their client's risk, protect their interests, and ensure a successful outcome. 

So when should you hire a mergers and acquisitions attorney? In short, the answer is in the earliest stages of planning a transaction–the sooner the better.

Why You Need an M&A Attorney in the Early Stages of Planning an Acquisition

When planning to acquire a company, the process begins with conducting your due diligence on the target. 

Engaging with an M&A attorney in the earliest exploratory stages of a potential transaction will provide essential business acquisition legal advice, focused on identifying legal risks and uncovering the target's true value. 

An M&A attorney will help you:

• Assess the Viability of the Target - Does the target have significant financial debt? Is there any pending litigation? Do they own their IP outright? These are essential questions, the answers to which could significantly affect the success and valuation of the deal. 

• Conduct Due Diligence - A skilled M&A attorney can help you evaluate the target's financial standing, operations, processes and technologies. They can also analyze their market position and competitive landscape, to determine the overall attractiveness of the acquisition from a legal and risk perspective. They will help you confirm the accuracy of statements made by the target about their business–or let you know those statements were wrong.  

• Determine the Best Structure for the Offer - There are many ways to structure an acquisition, such as asset purchase vs. stock purchase. The structure you choose will have advantages and disadvantages, but a mergers and acquisitions attorney will be able to advise you on the ideal structure for the offer based on your goals and acceptable level of risk. 

Why a Mergers and Acquisitions Attorney is Essential in the Early Stages of Planning a Sale

As a founder or stakeholder preparing for an exit, a mergers attorney for startups will help you get your affairs in order before opening up to potential buyers. This will allow you to identify risks and resolve them before buyers do, entertain multiple offers efficiently and maximize the valuation of your company. 

An M&A attorney will help you:

• Conduct Seller-Side Due Diligence - An M&A attorney will help you conduct your own organizational introspection, enhancing your negotiating position and increasing your value by proactively addressing potential legal concerns. For example, verifying ownership of intellectual property and resolving any outstanding litigation. 

• Prepare Documentation - You'll need to prepare your key legal documents, including cap tables, material contracts, and IP assignments. An M&A attorney will have these documents organized and easily accessible, demonstrating professionalism to potential buyers and streamlining their due diligence process. 

• Understand Your Legal Obligations - There are many moving parts to a sale, including compliance with appropriate regulatory requirements. Working with a mergers and acquisitions lawyer will minimize your risk and help you navigate potential hurdles, ensuring a clean and legally sound exit. 

Key Stages Where M&A Legal Services Are Essential

We've seen how beneficial M&A legal services are in the early stages, uncovering risks and enhancing your negotiating position. But even if you've already started down the path without the benefit of specialized business acquisition legal advice, it's never too late to gain the help of professional M&A legal services. 

There are several key stages where the help of an M&A attorney is extremely valuable. 

Due Diligence - Uncovering Risk

No matter which side of the buy/sell equation you are on, due diligence is a critical stage of the M&A process. 

At this stage, a mergers and acquisitions lawyer essentially becomes your legal investigator, tasked with uncovering any potential obstacles that could negatively impact the sale. 

For a buyer, this can range from conducting a deep dive into the legal health of the target (or acquirer), to scrutinizing contracts and IP portfolios. For technology companies, this often involves careful examination of IP ownership, and compliance with data privacy policies like GDPR and CCPA. 

For a seller, due diligence on your own organization will identify any potential weaknesses that a buyer might scrutinize. For technology companies this can include ownership of intellectual property, data privacy policies and compliance with industry regulations. 

Even when an organization has an in-house legal team, a mergers and acquisitions lawyer will work in tandem to provide specialized assistance that may be beyond the scope of your in-house team's skillset.

Structuring the Deal - Crafting the Right Legal Framework

How the M&A transaction is structured has very specific tax and legal implications. A specialized private equity M&A lawyer will advise you on choosing the best structure for the deal. They will minimize your legal and financial risks, while striving to meet your strategic objectives. 

Whether you choose to move forward as an asset purchase, stock purchase, or a merger, their business acquisition legal advice will uncover the implications of each structure type, and help you make the right decision to minimize legal and financial risks. 

Negotiating the Terms - Securing Your Interests

When it comes time to negotiate the actual terms of the deal, the expertise of a M&A contract negotiation lawyer takes center stage. 

The definitive agreement is the legally binding document that dictates the terms of the transaction, which your M&A attorney will draft and negotiate the key provisions of. Important aspects include the purchase price, representations and warranties and disclosures, the indemnification provision and closing conditions. 

Having an experienced mergers and acquisitions lawyer on your side at this crucial stage will ensure your interests are protected, and provide a clear framework for a successful transaction.

Closing the Deal - Ensuring Compliance

After the deal has been structured and negotiated, the closing process marks the formal completion of the transaction. A mergers and acquisitions lawyer will play a key role in finalizing and organizing all the details associated with closing including  identifying, preparing and reviewing regulatory filings, as well as the transfer of funds.

Post-Closing - Navigating Potential Disputes

After a deal has been closed, there may still be some legal tasks that need special consideration from an M&A attorney. Tasks like transferring licenses and permits, ensuring compliance with obligations specified in the purchase agreement, and addressing potential disputes arising from the transaction are areas where an M&A attorney can make a difference. 

Conclusion

Whether you're preparing for a sale of your company, or looking to make a key acquisition, the earlier in the process that you retain the services of a skilled mergers and acquisitions attorney, the better equipped you'll be to successfully navigate the process and achieve your goals. 

The benefits of working with an M&A attorney, particularly one with a deep understanding of the technology industry, are significant. Not only can their expertise save you time by effectively preparing your organization for the process, their skill and legal foresight developed from practice will help you avoid risks and pitfalls that can derail even the most promising of transactions. 

At SVTech, we offer M&A legal services tailored to the needs of your organization. With 20 years working in the heart of America's technology industry, we have the skill and expertise to provide timely and effective legal counsel in mergers and acquisitions for emerging to large-scale technology enterprises. 

Don't try to navigate the complexities of the M&A process without the assistance of a qualified mergers and acquisitions lawyer. 

Contact SVTech Law Advisors today for an initial consultation, and let us be your guide to a smooth and fruitful transaction process. 

Disclaimer

The information provided in this blog post is for informational purposes only and does not constitute legal advice. Please consult with a qualified attorney to address your specific legal needs.