Mergers and acquisitions are vital areas of corporate law that encompass a broad range of strategic business transactions, including the purchase of or merger with other companies, to achieve specific benefits.
The attorneys at Quadros, Migl & Crosby, PLLC are well-versed in mergers and acquisitions. Their experienced M&A attorneys will guide you every step of the way through the lengthy and complicated process in order to achieve a successful outcome.
Merger Definition
In corporate law, a merger involves one corporation being absorbed by another, with the surviving corporation assuming all the assets and liabilities of both companies. The term may also describe joining non-corporate entities but with varying legal requirements.
Acquisition Definition
The term “acquire” refers to gaining possession, whether directly or indirectly, through various transactions, such as a sale, trade, exchange, or other business transaction.
In Texas, acquisitions are commonly referred to as conversions.
Understanding The Differences
While the terms “merger” and “acquisition” are often used interchangeably and share similar objectives, they are, in fact, different business strategies with distinct legal and financial implications.
A merger is typically a voluntary, collaborative process, while an acquisition could be either voluntary or hostile. Additionally, mergers usually require forming a new legal entity, whereas an acquisition may or may not involve a change in ownership structure.
Key Factors To Consider When Acquiring Or Merging With Another Company
Thoroughly investigating the target company is crucial when pursuing a merger or acquisition to uncover potential issues that could impact the transaction. It also helps to ensure a successful deal. Our attorneys will work with you to obtain and analyze all relevant information and review with you their findings and recommendations, before proceeding with the merger or acquisition. This step of the M&A process is critical so that you are making a fully informed decision and mitigating risk prior to going through with your intended merger or acquisition.
Some considerations are:
Culture And Strategy
Is there a well-defined strategy driving the decision to pursue a merger or acquisition with the other firm? A successful transaction should provide value beyond simply increasing redundancy between the two companies.
Additionally, you want to ensure the merging companies have similar values and goals in order to make the most of their combined human capital.
Intellectual property
It’s crucial to be aware of the target company’s patents and intellectual property and their measures to safeguard their intellectual property and trade secrets. This information can help avoid potential patent infringement issues when merging with or acquiring the company.
Customers
Have a clear understanding of the target company’s client base, including their most significant clients, to identify any potential issues with client retention following the merger or acquisition.
Developing a client retention plan before the merger or acquisition is recommended to minimize any negative impact on the combined entity’s operations and market share. This can help ensure a smooth transition for clients and eliminate the need for post-merger compensation.
Litigation
When you merge with or acquire another company, you inherit its assets and legal obligations. This includes any pending litigation, such as suits filed by external parties or employees, and the terms of any settlements.
Additionally, investigate any judgments or liens against the company or its property. Seeking legal advice will help you understand the potential impact on the combined entity and develop a plan to mitigate any associated risks.
Property
Consider what property the other company has. What leases or deeds does the company have to pay? Will you keep them after the combination? If there are multiple office buildings, consider whether you will keep employees in separate buildings or have all your workforce in one place.
Let Quadros, Migl & Crosby, PLLC Help With Various Corporate Law Transactions
At Quadros, Migl & Crosby, PLLC, our experienced attorneys provide practical, cost-efficient solutions tailored to our client’s unique needs. By working closely with you, we ensure your interests and objectives are protected. Whether a startup or an established corporation, we help navigate the complex world of corporate law with confidence.
Count on Quadros, Migl & Crosby, PLLC for the following:
- Acquisitions
- Agreement Review and Negotiations
- Divestitures
- Due Diligence and Negotiations
- Mergers
- Pre-Deal Contracts Diligence and Catalog Management
- Risk Management
- Strategic Investments and Joint Ventures
- Supplemental Documentation and Deal Supporting
- Term Review and Negotiation
