Are you searching for an experienced San Diego mergers and acquisitions lawyer? Are you buying or selling a business, corporation or healthcare entity in Southern California? A merger or acquisition requires extensive experience and legal skill. It also requires San Diego business attorneys with the savvy to manage the transaction and preserve the excitement surrounding it, while establishing and guiding a process that can lead to success.
Did you Know Harvard Business Review Notes 70% to 90% of US Acquisitions Fail
The Harvard Business Review noted in a recent article that between 70% to 90% of US business acquisitions fail. The greatest challenges noted in their research based upon multiple studies are:
Challenges integrating separate corporate cultures
Lack of appropriate due diligence
Over-Valuation (overpaying for the acquisition)
Buying or selling a business, or merging your company with another requires a proven, experienced San Diego mergers and acquisitions attorney from the Watkins Firm. Why? The first answer is simple: the vast majority of our client’s mergers and acquisitions succeed, in spite of the dismal track record across the US.
The reason is also simple: Your Watkins Firm mergers and acquisitions attorney has more than 40 years of experience and a proven track record of success in these legally and financially complex transactions. Our client’s transactions succeed precisely because of the thorough due diligence, valuation, agreements and experience we bring to your side of the transaction.
Increasing the Valuation of Your Business
Are you interested in increasing the valuation of your business? There are several steps we can help you to take that will increase the value of your company in the transaction. The Watkins Firm works with our clients to make sure the corporate entity and associated corporate documents are strong and up-to-date. The condition of the corporate entity itself and the quality of not only the business financials but the corporate documents themselves increases the value of your business entity. The method(s) used to structure the transaction itself will have a heavy impact on related taxation, and the net amount of the proceeds you will ultimately receive for your business.
Experienced San Diego Mergers and Acquisitions Lawyer
Business transactions involving the purchase, sale, or merger of a company require careful planning and disciplined execution. Each stage of the process—from valuation and due diligence to negotiation and closing—carries legal and financial consequences that can affect the future of the business and its owners. Working with an experienced San Diego mergers and acquisitions lawyer from Watkins Firm helps ensure that each step of the transaction is structured to protect your interests while supporting a successful outcome.
Whether you are selling a business, acquiring another company, or merging two organizations, several key elements must be carefully evaluated before moving forward. A transaction that appears promising at first glance may pose hidden risks if the underlying business conditions have not been closely examined.
Important factors that should be evaluated during any merger or acquisition include:
- The stability and retention of key employees or management personnel
- The strength and reliability of major customer relationships
- Existing contracts, supplier agreements, and licensing arrangements
- Evolving competitors or market conditions affecting the acquisition target, or its industry or vertical sector
- The sustainability of the company’s products, services, and revenue streams
These considerations often determine whether the proposed transaction represents a genuine opportunity or whether additional risks must be addressed before closing.
When representing sellers, your Watkins Firm experienced San Diego mergers and acquisitions lawyer focuses on preparing the company for the transaction to support accurate valuation and strong negotiation leverage. Careful preparation may involve organizing financial records, reviewing contracts, and identifying potential issues that could affect the buyer’s due diligence review.
When representing buyers or companies pursuing a merger, we conduct a thorough investigation of the acquisition target. Due diligence based on checklists and four decades of experiece involves reviewing financial records, legal obligations, regulatory compliance, and potential liabilities that could affect the transaction’s value.
Key objectives during this process often include:
- Confirming the accuracy of financial representations and disclosures
- Identifying potential contingent liabilities or unresolved disputes
- Evaluating intellectual property, contracts, other assets, and operational risks
- Ensuring the transaction documents protect the buyer’s position
For sellers, it is always important to limit exposure once the transaction is completed. Many business owners want assurance that when the sale closes, they are free to pursue new opportunities without lingering legal or financial obligations related to the former company.
By guiding our clients through valuation, due diligence, contract negotiation, and transaction structure, your experienced San Diego mergers and acquisitions lawyer from the Watkins Firm helps improve the likelihood that the transaction will close smoothly while protecting the long-term interests of the parties involved.
Experience matters. How much do you value a proven track record of success when most others (between 70% to 90%) fail?
Pro-Tip: “Well, when you have a corporation for a long time, it becomes another person, a citizen, and you get credit for that corporation. That corporation can sign leases, that corporation can sign vendor contracts, it can get licenses, it can do all kinds of things that have built up over the years. Whereas if you have a brand new company, you’re personally guaranteeing everything. So if you want to buy a company that’s already running, you don’t have to renegotiate everything and you just come over with a good shareholder agreement and a stock purchase, or a MIPA, a Membership Interest Purchase Agreement you can step into the shoes of a very successful company and just hope it makes a profit.
The advantage to the buyers in a stock purchase transaction is they are stepping into the shoes of the seller. Sellers have tax advantages in selling stock. That’s always good because a stock sale on something you’ve held for a long time, it’s going to be taxed at a better rate. Also it’s a cleaner transaction. You just sell the stock, there’s still going to be due diligence and you still have to make representations and warranties about the company. So it’s still going to be your liability if you’re not honest and truthful, but you definitely would prefer to do a stock sale.
What are some of the effective strategies? You might request a holdover, having people work across the transition. There’s always something. And as a deal maker, that’s what a transaction lawyer is. You want to come up with creative ways to get the deal done while certain contingencies wait. We have had money and trust accounts on deals for two years while a contingency is fulfilled by the seller. So you’ll pay 2 million for a project and there’s $200,000 coming to the company, but it’s not going to come for a while. So the seller will say, well, let’s keep the $200,000 for me in escrow until the company I’m selling gets that $200,000 and we get the deal done. Again, getting what you’re paying for, knowing that you’re getting full disclosure, Goodwill. The risk – people taking off and forming another company and competing with you, and also not having the expertise that the seller has. So, full disclosure and expertise. Those are probably the key things we see in whether companies we acquire are successful.” – Dan Watkins, Founding Partner
The Transition is another Key to Success in a Merger or Acquisition
This transition is another key to success: how do you transition through the merger or acquisition as new ownership and management step in? There may be a cross-over period where the present owner(s) or manager(s) serve as an executive or consultant and remain active in the business to ensure a smooth transition and the preservation of business assets and customer relationships. How will these transitional roles be compensated for that work, and when will it be completed?
At the Watkins Firm we have helped scores of business clients to successfully complete a merger or acquisition over more than four decades of experience and service to the San Diego business community.
We invite you to review our Podcast Episode 13 – Mergers and Acquisitions, as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today. We will discuss the process itself, the critical steps for you as a seller, a buyer and/or a merging partner as well as the potential pitfalls associated with these legally and financially complex transactions. What are the best possible strategies to ensure that you come through the process with the highest probability of success and positioned to move forward into the next phase of your business or personal life? Ask about our successful experience in transactions just like yours.
Meet Daniel Watkins:
Daniel W. Watkins is a true people person who sincerely listens. He cares deeply about what others are going through. Dan enjoys digging into the facts and finding creative solutions to problems. He contributes his insights candidly and constructively.
Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.
Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a trusted litigation strategist and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.
He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.
THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR
Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.
In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.
