Mergers and acquisitions create opportunities for new business growth in San Diego and across regional, national and international markets. The two primary tools for the acquisition of another company or a portion thereof are a “stock purchase” or an “asset purchase.”
The Difference Between an Asset Purchase and a Stock Purchase
What is the difference between an asset purchase and a stock purchase? An asset purchase allows you to select and acquire only the specific assets or division of a company or competitor which help you to accomplish your business goals, without the need to take on that company’s liabilities or other products, facilities or services.
Asset purchase contracts cover everything from inventory to vehicles, real estate to customer bases and even intellectual property. There may be tax consequences, government contracts or other complications or sound business strategy which require a “stock purchase.” This is the primary method for acquiring an entire company and all of its assets, but requires you to assume all debt and liability of the acquired business as well.
In a stock purchase the buyer “steps into the shoes of the seller.” This strategy allows all assets to maintain existing tax basis as well as existing permits and otherwise non-assignable licenses. There is a significant risk of contingent liability requiring the buyer to conduct thorough due diligence. The experienced mergers and acquisitions attorneys at the Watkins Firm have more than 40 years of experience in these complex legal and financial transactions. We help to structure to a successful transaction to ensure a smooth transition while providing a way to recoup damages or discrepancies in the books.
Mergers and Acquisitions Create Opportunities in San Diego and Southern California
While mergers and acquisitions create opportunities for rapid growth and profit here in San Diego and Southern California there are risks and rewards to balance.
Each merger or acquisition strategy has advantages and potential disadvantages, and you should consult with our experienced legal team with deep business acquisition knowledge gained across thousands and thousands of M & A transactions. Ask about our proprietary library of proven, battle-tested contracts and due diligence checklists that can be custom-tailored to your unique requirements. This saves our clients time and money while ensuring successful and profitable transactions.
Mergers and acquisitions generate new opportunities for business growth and profitability. The attorneys at the Watkins Firm have served the San Diego business, real estate, tech, medical and healthcare business communities for more than four decades. We have helped thousands of businesses to expand and grow and have substantial experience in stock purchase agreements and asset purchase contracts.
If you are considering buying out a competitor, or need advice on mergers and acquisitions 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.
