A business acquisition could expand your sales and profits and open new markets for your San Diego or Southern California corporation. Many companies are being forced to substantially downsize their force or close altogether as a result of the pandemic’s impact on San Diego. This may be an opportunity to acquire valuable assets or buy out a competitor altogether.
How a Business Acquisition Could Expand Your Sales and Profits in San Diego and Southern California
When many business people think of “mergers and acquisitions” they imagine large corporate entities and huge financial transactions. However, most actual mergers or acquisitions occur when a small to mid-sized business combines forces with another business, or purchases the assets of another company in order to grow. This type of business acquisition could expand your sales and profits while helping your company to expand it’s product or service offering, enter new geographical or vertical markets, or simply expand your customer base or operational capacity quickly and efficiently. A successful acquisition should expand your San Diego business capability and capacity while providing a path to new geographic or vertical markets.
The Two Primary Options in a Business Acquisition Transaction
The two primary options for an acquisition are a “stock purchase” and an “asset purchase.” In a stock purchase you acquire all assets of a company or corporation, and assume all debts and contingent liabilities of that business as well. There can be great risk associated with this strategy, but there are occasions where it is important to preserve government contracts or intellectual property and a stock purchase may be the most viable option to do so. An asset purchase allows you to acquire only the specific equipment, real property, vehicles, products, inventory or customers you wish to take on, without exposing you to further contingent debt and liabilities.
If you are considering expanding your San Diego business it is important to work with seasoned, experienced attorneys who can guide you through a merger or acquisition. The Watkins Firm has served San Diego businesses for more than four decades, and has extensive experience in hundreds and hundreds of mergers and acquisitions. We can guide you through the process, help you to avoid potential pitfalls, and ensure that the plans you put into action bring the types of return you anticipate in each transaction.
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.