By Richard Harroch, David Lipkin and Richard Smith.
Mergers and acquisitions involving privately held companies entail a number of key legal, business, HR, intellectual property and financial issues. To successfully navigate a sale of your company, it is helpful to understand the dynamics and issues that frequently arise:
- Valuation is negotiable
- Deals can take a long time to market, negotiate and close
- Sellers do need to anticipate the significant due diligence the buyer will undertake
- Seller’s financial statements and projections will be thoroughly vetted by the buyer
- Multiple bidders will help the seller get the best deal
- You need a great lawyer and M&A legal team
- Consider hiring an investment banker
- Intellectual property issues will be important
- Don’t get trapped at the letter of intent stage
- The definitive purchase agreement is extremely important
- Employee and benefits issues will be sensitive and important
- Understand the negotiation dynamics
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