Category Archives: Mergers and Acquisitions

What Goes Into a Merger and Acquisition Letter of Intent?

We hear about various companies engaging in mergers and acquisitions all the time but what exactly do those two words mean? Webster’s Dictionary defines merger as the combining of two things, especially companies, into one. An acquisition, meanwhile, is defined as an asset or object bought or obtained, typically by a library or museum but it can also apply to companies. Continue reading

Why Ignoring a Mergers and Acquisitions Strategy Will Cost You Time and Sales

M&A Strategies Are A Key Method Of Efficiently Growing A Business:

One of the most effective strategies utilized in the business world today is the strategy of acquisitions and mergers. Under the right circumstances, this strategy can prove to be ideal to upgrade access to markets at the same time as gaining the benefit of removing excess from the act of consolidation. These strategies fall under the banner of M&A and they are often utilized across international borders in today’s global marketplace.

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Deciding Whether To Have An Asset Sale Or Stock Sale

The decision to structure the sale of a business as an asset or a stock is difficult because the buyer benefits from assets and the seller benefits from stock sales. All business transactions are individual and should be discussed with the respective legal and financial parties involved.

What’s Involved In An Asset Sale? 

An asset sale involves a buyer purchasing individual assets and the liabilities that go along with them while a stock sale is a buyer purchasing a piece of an owner’s corporation. The main concerns when dealing with business transactions are the tax implications and any potential liabilities. 

Is A Stock Sale Possible? 

A stock sale is not possible if a business is a sole proprietorship, partnership, or a limited liability company. Simply because these business structures do not have stock. The owners of these businesses can sell their interests. If the business is incorporated, the buyer and seller have to agree on if they should do an asset sale or stock sale. 

What’s Gained In An Asset Sale? 

With an asset sale, the buyer gets the company assets, such as all equipment, licenses, leaseholds, trade secrets and names, phone numbers, and inventory. No cash is involved, and the long-term debt remains with the seller. This is called a cash-free, debt-free sale. Net working capital is also included, which is simply accounts receivable, payables, prepaid and accrued expenses. 

What’s Gained In A Stock Sale? 

With a stock sale, the stock is purchased directly, and the buyer is the new legal owner. Any unwanted assets and liabilities will be resolved prior to the sale. Stock sales are different from asset sales because the assets don’t have to be listed as individual since each asset is already within the corporation. 

What Is More Common Asset Sales Or Stock Sales? 

According to Pratt’s Stats database, almost half of all business transactions are stock sales. Of course, this generalization varies by company size. The larger the company, the more likely it is to have stock sales. If you need help deciding whether to sell as an asset or stock you can always reach out to our experienced Coachella Valley mergers and acquisitions attorneys.

Challenges Companies Face with Mergers and Acquisitions

Progressive corporations have realized that a merger is not only dependent on the combination of the two companies’ assets, but also of the cooperation of their employees and human resources. Given that the demand for capital, heavy regulatory burdens, and shifting models of compensation, a business has financial challenges they face when completing a Merger and Acquisition.

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What Factors Make a Merger or Acquisition Successful Or Not?

Mergers and acquisitions help to provide and reveal extra development and benefit openings. Business visionaries regularly utilize mergers and acquisitions as an exit strategy and it is vital in deciding their definitive achievement and budgetary autonomy. It should be noted that things don’t generally go smooth in the execution of mergers and acquisitions and now and then it is a total disappointment. Continue reading

What is a Letter of Intent in a Merger and Acquisition?

Mergers and Acquisitions are undertaken by companies to achieve growth and efficiency. The M&A strategies allow higher profits for a business than just organic growth. A study showed companies who use M&A strategies have a shareholder return that is 4.8 percent. Companies not using these strategies have shareholder returns of 3.3 percent. This has caused corporate players to see the disruption as a tool and they are capitalizing on the competitive markets opportunities Continue reading

How to Avoid Pitfalls to Mergers and Acquisitions

Depending on your business and financial plan, one of the best ways to execute a successful exit strategy is having your company absorbed in a merger and acquisition (sometimes referred to as M&A). For many entrepreneurs, the true mark of success is having your company acquired for a substantial profit by a larger firm. Unfortunately, the path to mergers and acquisitions can have a number of pitfalls, and therefore it is important to have expert guidance. Continue reading

How Lawyers Assist In Complex Business Decisions and Planning

Our Palm Springs mergers and acquisitions firm helps clients through complicated business transactions and difficult financial times. If yours is a nonprofit organization, our attorney can help you form a nonprofit organization, receive charitable donations, supervise and record endowments, and file tax forms. Our attorney can help you merge nonprofits and remain compliant with stakeholder guidelines. Continue reading

How To Choose The Right Leveraged Buyout

What Is A Leveraged Buyout?

A leveraged buyout, also known as a LBO, is a strategy tactic from big investment companies that allows them to use borrowed funds to pay monetary responsibility for their acquisition. They also use debt to finance their aggressive business deals using items that include junk bonds, traditional bank loans, and other similar sources. Continue reading

Comparing Organic Growth to M&A Growth

Stagnation is never an option in business. Yet, many small businesses lack the capital to grow at all costs. Small businesses must consider their needs today while still planning for growth in the future. It is like a three-legged stool where one leg is speed, one leg is cost and the final leg is quality. Continue reading

The Phases of a Merger or Acquisition

Whether you’re considering a horizontal merger, in which you acquire a direct competitor or a vertical one, in which you take over one of your customers or suppliers, consider enlisting the help of our Palm Springs mergers and acquisitions firm. Our professionals can also help you acquire new markets in a market-extension merger, new goods in a product extension merger, or combine a wide array of specialties in a conglomeration Continue reading

Why Your Team Needs a Mergers and Acquisitions Expert

Most companies in Palm Springs, California, do not have the resources they need to successfully complete mergers and acquisitions. Yet, it is vital that competent professionals be consulted. Many people mistakenly believe these professionals only exist within investment banks. The next time you are considering merging with another business or buying a business, ask your business network for recommendations on our Palm Springs mergers and acquisitions firm. Continue reading

Why Do the Majority of Mergers and Acquisitions Come Up Short?

Mergers and acquisitions are not successful for different reasons. The disappointment can be before the physical merger and procurement occur, amid the usage process or amid the running of the new consolidated substance. Potential disappointments fruition for varying reasons.

Coachella Valley mergers and acquisitions can build a company’s shot of having an effective merger and acquisition with the help of careful development, by living up to expectations inside of a pre-characterized philosophy and by dealing with the entire merger as a whole project. Continue reading

Thinking About Doing a Leveraged Buyout? 4 Tips to Ensure Success

A “bootstrap buyout,” more formally known as a leveraged buyout (LBO), is a method of obtaining a business wherein the buyer utilizes a blend of other investors’ money and business assets to purchase a business. These are tough times and credit markets are drying up. Finding funds can be difficult, however, these tough times often lead to enormous investment opportunities because there is a good amount of value in an LBO, if you find the right business for the right price. Our Coachella Valley corporate attorneys have gathered a few tips to help ensure your success. Continue reading