Are you searching for ways to acquire a competitor or expand your company with a stock purchase? The San Diego mergers and acquisitions attorneys at Watkins Firm provide sound counsel in these transactions while helping to create or preserve the positive atmosphere of the transaction.
What is a Stock Purchase
One of the fastest ways to acquire a competitor or to purchase a San Diego business is known as a “stock purchase.” A stock purchase allows you to acquire total control of all interest in an existing corporation. Stock purchase transactions carry an element of substantial potential risk. This is why it is important to have the counsel and guidance of the experienced San Diego business attorneys at the Watkins Firm.
Depending on the nature of the company you are hoping to acquire and the manner in which they do business a stock purchase is the only viable option. A stock purchase may be required to preserve the protections of some intellectual property or to maintain existing governmental or corporate contracts and the related customer base.
You can expand your company with a stock purchase while helping to “mask” the acquisition of the company so that customer confidence and important business relationships are unaffected by the transition.
The Risks of a Stock Purchase and The Importance of Due Diligence
There are substantial issues of risk associated with a stock purchase. The key to these complex financial and legal transactions is due diligence. The Watkins Firm has represented clients in acquisitions in San Diego and Southern California for more than 40 years. We have developed proprietary, proven due diligence checklists to ensure thorough analysis of every aspect of the target acquisition from the books to the customer base, from the industry to the nature of the products and services of the company itself. Has anything changed in either the market or the customers of the target?
Stock purchase transactions carry over existing corporate liabilities and may open your business to legal disputes down the road. The stock purchase agreement must be carefully constructed to limit the liabilities that are transferred as part of ownership, while holding the seller responsible and accountable for all aspects of the transaction. For example, it might be necessary to structure the transaction to hold back a portion of the sales proceeds to allow time for reconciliation of any disputes or erroneous information and to resolve identified liabilities or disputes.
The Watkins Firm Can Help You Expand Your Company with a Stock Purchase
The Watkins Firm can help you expand your company with a stock purchase in San Diego or Southern California. Put our 40+ years of experience to work for you, protecting your interests and ensuring full due diligence and a successful acquisition transaction. We invite you to review our Podcast Episode 13 – Mergers and Acquisitions, the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
