How can a California stock purchase agreement lawyer at the Watkins Firm help you to grow your business? Expand your San Diego or California business with a stock purchase and acquire a competitor or a portion of a larger corporation that no longer meshes with their primary corporate strategy.
Key Takeaways about finding an Effective California Stock Purchase Agreement Lawyer:
- In a stock purchase transaction, you are acquiring the entire company, including the entity and all of its assets, liabilities, customers, employees, inventory, IP, real estate, and existing contracts.
- A stock purchase is different from an “asset purchase” as you literally “step into the shoes” of the target company’s ownership. This means you will be responsible for all debts and contingent liabilities as part of the acquisition.
- Due diligence checklists are a crucial element in any effective stock purchase transaction. Look for a firm with an existing, proprietary library of proven due diligence checklists and M & A contracts.
What Are You Acquiring in a Stock Purchase
In a stock purchase, you acquire the entire corporate entity and all it’s assets and liabilities such as:
- All existing government and business contracts
- Intellectual Property
- Real Estate
- Inventory and Assets
- Employees
- Customers, Suppliers and Distribution Agreements
- Debts and any Contingent Liabilities
What are the Primary Risks in a Stock Purchase Transaction?
Your Watkins Firm San Diego stock purchase agreement lawyer will provide sound counsel, due diligence and effective documents and strategy to reduce the risks in a stock purchase transaction.
The item on the list above, “debts and any contingent liabilities” represents potentially the greatest risk to your plans. A stock purchase is different from an “asset purchase” as you literally “step into the shoes” of the target company’s ownership. This means you will be responsible for all debts and contingent liabilities as part of the acquisition.
The primary reasons for the failure of a business acquisition are poor due diligence and the inability to blend the corporate culture of the target with the acquiring company’s operational and management strategies.
This is why due diligence is one of the most important aspects of a successful stock purchase. The mergers and acquisitions attorneys at Watkins Firm protect our clients and provide due diligence to examine all aspects of the transaction as well as present liabilities and the potential for contingent liabilities in the future.
What is the trajectory of the market of the targeted acquisition and it’s position within that market? How will the stock purchase acquisition improve not only the bottom line of you, the buyer, but also increase your reach into additional potential vertical and regional markets?
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 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. 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
Your Experienced, Proven San Diego Stock Purchase Agreement Lawyer at the Watkins Firm
Your experienced, proven San Diego stock purchase agreement lawyer at the Watkins Firm guides you through every step in this complex process. We have helped thousands of business through these transactions over our four decades of service to the San Diego region. This may be an excellent opportunity to expand your San Diego business with a stock purchase transaction. However, there are often hidden risks and exposures which can be reduced or mitigated altogether with a strong process and agreement or contract(s).
There are many qualities you should look for in your San Diego stock purchase agreement lawyer. The Watkins Firm brings a solid, proven track record across more than four decades. We have extensive due diligence strategies and proven checklists in our proprietary contract library, as well as successful stock purchase agreements which can be cost-efficiently tailored to your unique requirements and the transaction at hand.
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.
Acquiring a competitor or a part of a large corporation can be an excellent strategy for growth and your San Diego stock purchase agreement lawyer at the Watkins Firm can be the difference between failure and profitable success.
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.
