Mergers and acquisitions (M&A) are very specific types of business law. M&As transactions may include small family-owned companies or small partnerships to large corporations. No matter what size business you may own, a South Carolina mergers and acquisitions lawyer can be very helpful before, during, and after a merger or acquisition.
Below are five common questions that many people have about mergers and acquisitions.
What Is the Difference Between a Merger and Acquisition?
Even though these business transactions are often referred to together as M&A, they are two very different transactions. A merger involves two companies joining together to form a new company. An acquisition involves a company taking control of another company and assuming its assets and debts.
What Are Some Common Types of M&As?
There are various ways that an M&A can be accomplished. For example, a person or company may purchase the shares of an existing company. The company continues to operate, but with new shareholders owning the company. A company may also purchase the assets of an existing company without assuming any of the liabilities of the company. With a merger, two companies “merge” their assets and liabilities into one company.
What Are Some Common Reasons for M&As?
There are many reasons why an owner or owners may choose to sell a company or merge with another company to form a new company. The reasons for M&As are as unique as the companies involved in the transactions. Some common reasons that owners may consider a merger or acquisition include:
- Desire to grow and expand beyond the company’s current limits
- The owner or owners wish to retire or begin another business venture
- Owners want to relocate themselves or the company
- The financial needs of the owner or the company
- To comply with a business succession plan
- The need for greater infrastructure or management team
- Need for additional resources
- Medical or health concerns of the owners
The reasons or motivations for a merger or acquisition may have an impact on the process and terms of the M&A. For example, if the company is in financial distress, another company may acquire it for a bargain compared to a company that is generating a high profit.
How Long Does It Take to Complete a Merger or Acquisition?
It can take several months or over a year to complete an M&A transaction, especially if the marketing phase is lengthy. Once a company or companies agree to a merger or acquisition, the timeline can be impacted by several factors, including how motivated the parties are to complete the transaction, performance of due diligence, issues with financing, and how organized each party is before and during the transaction. Working with an attorney who routinely handles M&A transactions can help avoid some of the issues that cause delays during a merger or acquisition.
Do I Need a South Carolina Business Attorney to Assist with a Merger or Acquisition?
Selling a business or merging two businesses is a complex process. There are many issues to be addressed before beginning the process of marketing a company. A seller who wishes to market the company quickly and efficiently must be prepared and organized. A significant amount of work must be completed to ensure that the company can withstand the scrutiny of a purchaser.
Purchasers need to be very careful to perform due diligence before purchasing a company. If a buyer does not thoroughly inspect all facets of the company, the purchaser may realize too late that they overpaid for the company or purchased a huge legal problem.
A South Carolina business attorney can help sellers and purchasers protect their best interests throughout the process of a merger or acquisition. Contact Willcox, Buyck & Williams, PA today. Our attorneys provide legal guidance and support to ensure that his or her client does not close a deal that results in costly business and legal problems.