Mergers and acquisitions help a company to grow and expand into new markets.  The experienced mergers and acquisitions attorneys at the Watkins Firm can help you to develop a successful strategy.

How can an asset purchase help to grow your business while preventing exposure to contingent liabilities?  An asset purchase contract or agreement is used to purchase the assets, real estate, customers, intellectual property, equipment, inventory or real estate of another company without exposing your business to additional liabilities associated with the other company.  An asset purchase allows you to target the specific assets you need to acquire to expand your own opportunities and move forward with profitable business.

When it comes to acquiring part or all of a competitor or a division of a corporation who may be downsizing there are two primary tools: an asset purchase agreement and a stock purchase agreement.  A stock purchase agreement is used to purchase an entire company.  This vehicle is used when you wish to take over every aspect of the business including existing government contracts, subsidiaries and employees.  The disadvantage of a stock purchase is that you also must assume all debts and liabilities of the company you acquire.  This additional exposure may not be necessary if you only need to purchase specific assets to accomplish your business goals.

The experienced business attorneys at the Watkins Firm know mergers and acquisitions help a company to grow and prosper.  We have decades of experience advising our business clients in all aspects of buying part or all of a business, as well as selling your company.  We help you to negotiate the asset purchase contract and perform due diligence to ensure that you know exactly what you are acquiring, any encumbrances that you would assume and that you receive clear title to those assets as part of the transaction.

Pro-Tip: “Usually everything’s different. By the way, everybody’s different. Every transaction. Different people who own companies that sell companies have colorful personalities and they’ve gotten successful by doing things in a certain way, and you have to be able to work with them on their terms. So you meet with them, you find out what they want. You run some ideas by them, you run it by their accountant, and then you come up with a letter of intent. Or if you’re the buyer’s counsel, or even if you’re the seller’s counsel, you start discussions off and then somebody turns it into a letter of intent.  And the letter of intent, it seems like such a soft thing because it’s not binding and we’re just starting, but actually the letter of intent’s a crucial piece of this process.

The Letter of Intent (LOI) can be one of two things. A letter of intent can be an offer, and a letter of intent can be more of, this is our understanding. In fact, we sometimes call that a Memorandum Of Understanding (MOU). So you’ve got your LOI and MOU. So if you have these kinds of discussions, they’re just outlines for how to close a deal, and that’s all a good lawyer needs is a one or two page outline. And we can take it and put all the what ifs in there and ask you a whole bunch more questions and have the accountants ask you questions, and whoever is financing, if that’s the case, ask for what they want and bring it all together into an agreement that ends up closing.”

If you are considering purchasing all or part of a competitor or another corporation it is important to learn how mergers and acquisitions help a company to grow and the contracts and legal services which will be required to successfully accomplish this.  We invite you to review our podcast Episode 40 – Keys to a Successful Stock Purchase Acquisition as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.