Preparing for a company acquisition or a merger comes with many time-consuming challenges. In order to have a successful and stress-free sale, you’ll need an organized management team, dedicated advisors, and professional legal counsel throughout the process. These individuals will need to understand the essential components of an M&A transaction, including the financial, legal, and business issues that may present themselves throughout the process.
Without trusted and experienced professionals guiding you through the process, your company may encounter dangerous and unfavorable situations. Speak with a business sales lawyer as soon as possible, reducing the likelihood of you and your company suffering damage during a merger and acquisition.
5 Ways to Prepare Your Company for a Merger and Acquisition
When you are getting ready to undergo a company transaction, there are various steps that individuals can take to better understand and prepare their company for a merger and acquisition. Consider the following ways you can better prepare your company for an M&A transaction:
Prepare for Extensive Due Diligence by the Buyer
A buyer will perform reasonable care and diligence before entering into the transaction to ensure they know what they are purchasing, their assumed obligations, the contingent liabilities, litigation risks, intellectual property issues, and problematic contracts. Knowing and anticipating company’s important details and issues will prepare you for questions a potential buyer may ask.
Compose an M&A Online Data Room
An online data room holds vital company documents and information in an electronic warehouse. Having an area online where all your company’s important information is stored can significantly help handle buyers’ due diligence. The online data room stores documents like financial statements, financial information, information on intellectual property, vendor and customer contracts, and more.
Draft Disclosure Schedules
Disclosure schedules provide factual information required by the acquisition agreement and allows the selling company to disclose and carve out exceptions to specific warranties and representations. If a disclosure schedule is incorrect or incomplete, the mistake may lead to the termination of the sale transaction.
Review Financial Statements
One of the most important steps to take when preparing for a merger or acquisition is the financial statement review. While the buyer wants to ensure that the company they are buying has well-documented statements, the seller will need to make sure their documents are prepared according to generally accepted accounting principles (GAAP).
Hire an M&A Lawyer
The process of a merger and acquisition transaction may incur significant legal challenges. Handling a complex M&A sale without a lawyer may put you and your company at risk of an unfavorable and financially risky outcome. An attorney’s knowledge of contracts, specific legal information, and negotiation strategies will prove highly beneficial to your company transaction.
Considering the above steps can increase your likelihood of a successful and smooth M&A transaction. If you are pursuing a merger and acquisition transaction, speak with a legal representative as soon as possible.
Contact an Experienced Utah Merger and Acquisition Lawyer Today
With over 18 years of experience representing business owners, executives, investors, and more, Jeffrey Cardon at Cardon Law will provide you with legal guidance and representation you can trust. His firsthand experience handling business negotiations and entrepreneurial advancements offers clients the necessary resources for smooth business transactions. Our team at Cardon Law will protect and serve you to the best of our ability.
Learn more about our services and how we can assist with your business transaction by calling (801) 225-6700 or filling out our contact form today.