Experienced business owners understand merger or acquisition is a sound strategy for growth in San Diego. Many business professionals are a bit overwhelmed with the term mergers and acquisitions, however these important events in the life of a business are actually quite common. The two primary strategies for accomplishing this task include an asset purchase or a stock purchase. An asset purchase allows a business to acquire specific equipment, real estate, production capacity, inventory, vehicles and other business assets required to expand operations or target new vertical or geographic markets.
A stock purchase is used to acquire a business outright. In a stock purchase the buyer assumes all assets and liabilities of the company they are purchasing, and this requires extensive due diligence, negotiation and strategies to protect the buyer from unforeseeable contingent liabilities that might arise once the transaction is completed. Investigation includes an assessment of all assets and their present condition, associated financing, corporate debt, products and intellectual property, the customer base and employees, as well as past, present and future sales and business development.
The experienced business attorneys at the Watkins Firm have served the San Diego business community for decades. Our extensive experience in all forms of mergers and accquisitions, stock purchase agreements, buy/sell agreements, and asset purchase contracts is a valuable asset for any San Diego business searching for new opportunities for growth and expansion. What are the risks you will face? How do you approach a competitor or even a major corporation about purchasing the assets your require or an under-performing division? How do you ensure existing customers and key employees remain during the transition?
Perhaps the most important question is how to ensure that part of the proceeds are held back to cover unforeseen liabilities or discrepancies between actual experience and what was disclosed prior to sale. It is also important to ensure key players in the existing organization remain as consultants or active participants in the company after the acquisition to ensure the transfer of goodwill.
Do you have questions about how to accomplish this and why a merger or acquisition is a sound strategy for growth in San Diego? We invite you to contact us for a free consultation at 858-535-1511.