With the forecast of mergers and acquisitions being favorable for 2016, the importance of having experienced legal counsel involved in the process from beginning to end cannot be understated. For companies unfamiliar with the process, they may underestimate the value that a law firm brings to these transactions at the outset.
As such, this post will focus on what a lawyer can do in the months (or weeks) leading up to a potential sale.
Engaging an investment bank (or partner) – No transaction takes place without the proper funding. So part of an attorney’s work in a transaction involves approaching an investment bank or banker and evaluating the different offers that may come from such an institution.
Confidential Information Memorandum – Once an investment bank is chosen, counsel will work on developing a teaser that describes the company and its potential as an acquisition target, as well as a comprehensive memorandum that will only be distributed to potential buyers who sign a non-disclosure agreement.
Management presentations – If a buyer continues to be interested, counsel will arrange interviews with the company’s principals and may even help in conducting presentations that help the buyer better understand the company’s strengths and areas requiring improvements.
It is important to understand that these elements precede the due diligence process, which encompasses a number of other tasks that legal counsel is responsible for. Nevertheless, having insight into what experienced attorneys can do to give accurate forecasts, assess risks and benefits and avoid troubling legal issues is helpful when choosing a law firm.