San Diego Mergers and Acquisitions Attorneys

SAN DIEGO MERGERS AND ACQUISITIONS ATTORNEYS

Expand Your Business Through Purchase of Another Company’s Stock or Asset(s)

Why do you need the experienced San Diego Mergers and Acquisition attorneys at the Watkins Firm?  Mergers and Acquisitions, often simply referred to as M & A, is one of the most complex areas of law.  These complex legal and financial transactions required an experienced, proven partner who can guide you through the process, and protect your interests at every step.

3 Key Takeaways About Mergers and Acquisitions:

• While an Asset Purchase Agreement or APA may seem like a fairly straightforward process, there are actually substantial risks for the seller and buyer alike.
• Acquiring an ownership interest in a business, as one would in a Membership Interest Purchase Agreement or MIPA, Stock Purchase Agreement, or gaining control of an entity itself is one of the most complex, risk/reward scenarios in business.
• Mergers and Acquisitions attorneys must have extensive experience to protect the interests of a buyer or seller alike.  Look for attorneys with decades of experience in thousands of transactions like the one you are considering. Ask about their track record of success in past M & A transactions.

40+ Years of Experience in San Diego Mergers and Acquisitions and California M & A Transactions

The Watkins Firm has guided our clients through successful mergers and acquisitions transactions in California for more than 40 years.  Why do you need an experienced business attorney for an asset purchase or stock purchase transaction in San Diego or anywhere in California?

The most common business acquisitions transaction in California is an asset purchase. These may seem like a straightforward “this for that” transaction, however, an asset purchase transaction actually represents substantial risk for the buyer and seller alike.  The Asset Purchase Agreement or APA is the most common contract that governs asset purchase transactions in California.

What are the risks in an asset purchase for the buyer and seller? The buyer’s concerns include, but are not limited to:

1. Clear title – can the seller provide documented, clear title?  Does the seller maintain full legal ownership of the asset(s) involved in the transaction? Are there other owners (members or shareholders) who have an interest in the assets that might object to the sale?
2. Undisclosed liens or other encumbrances – are the asset(s) to be acquired free of any encumbrance, or are they collateral for a loan, and secured by judgments, a tax lien, or a UCC Filing?
3. Successor liability – did you know there are liabilities that might still transfer to the buyer in an asset purchase? Issues with employee benefit issues, unpaid taxes (payroll, sales, property), product liabilities and even environmental concerns can follow the asset to the new buyer in a mergers and acquisitions or asset purchase transaction.
4. Valuation and contract issues – over-valued assets, hidden defects or needed repairs, or the risk of the ability to collect acquired accounts receivables. Many contracts are non-transferrable, and many contracts have termination clauses triggered by any change in ownership.

The seller’s concerns in an asset purchase transaction include, but are not limited to:

1. Payment disputes – this is especially true if the transaction involves seller financing or installments, or an “earnout” provision, where a portion of the purchase price is based upon specific or future performance.
2. Unforeseen liabilities – allegations of misrepresentation, conditional issues, warranty claims or “retained liabilities” (where unpaid tax obligations, debt instruments, or even undisclosed or pending litigation comes back on the buyer). 
3. Consents and covenants – specific assets require consent of other members or shareholders, lenders, or even customers.  The failure to gain required consent prior to closing exposes the seller to considerable damages. Breach of any representation, warranty, promise not to compete, trade secret, intellectual property rights or other restrictive covenants can result in substantial financial liabilities.
4. Issues with employees, customers or vendors – asset purchase transactions involving the sale involving customers, employees, and/or suppliers are fraught with contingent risks exposure to financial and reputational damages.

Stock Purchase or Membership Interest Purchase Transactions

Your company may want to buy or merge with another entity for any number of reasons. Maybe you are an entrepreneur who has built up a business and you are now ready to sell it. Maybe you believe you can gain greater efficiency by working with another company in a joint venture.

You may be an individual investor who is interested in acquiring an ownership interest in an LLC (MIPA) or Corporation (stock purchase). The Watkins Firm provides sound advice and counsel, due diligence and contract-related services when you need an Asset Purchase Agreement or APA, Membership Interest Purchase Agreement or MIPA,  Stock Purchase Agreement, merger, capital reorganization, leveraged acquisition or Leveraged Buy-Out (LBO), Management Buy-Out (MBO) and/or divestment.

We have developed a proprietary library of proven, battle-tested acquisition contracts and due diligence checklists. We add a positive “can do” attitude to the atmosphere of the transaction based in genuine experience in thousands of M & A transactions.

At the Watkins Firm, our experienced mergers and acquisitions attorneys counsel clients here in the San Diego area, throughout California, and across the United States on their options for the purchase, sale and merging of small, medium and large businesses, or specific assets. 

We have represented business individuals and clients of all sizes in literally thousands and thousands of these legally and financially complex transactions. Why are the vast majority of our M & A transactions successful when the Harvard Business Review recently released a review of dozens of major studies showing the average merger or acquisition fails more than 70% of the time?

Your Watkins Firm mergers and acquisitions attorneys have more than four decades of proven, successful experience in M & A transactions of any size or complexity, representing private investors, businesses, shareholders, members, private equity funds and large corporate entities who seek growth through acquisition or to sell their position to prepare for another opportunity or retirement.

Our success rate in asset or stock purchase transactions is much higher than 70% of the time!  When you carefully structure a transaction, perform necessary investigation and due diligence, verify all details, warranties and representations, and master valuation and ownership issues, the result for our clients is success!

We invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today to learn more about buying or selling a business, mergers or joint ventures.

Other Important Mergers and Acquisitions Content Pages and Blogs:

Stock Purchase Agreements
Asset Purchase Agreement or APA
Membership Interest Purchase Agreement or MIPA
The Difference Between a MIPA and an APA
What is the Difference Between a Merger and an Acquisition?
California Mergers and Acquisitions Require a Skilled Attorney
The Challenges of Mergers and Acquisitions in California
Eliminate a Lot of the Risk of a San Diego Asset Purchase

Listen to our Recent Sound Business Insights Podcast:
“Episode 13 – Mergers and Acquisitions”

Combining Business Operations Through a Variety of Different Strategies

Mergers and acquisitions is a general name for a broad category of many different types of business transactions by which the operations and assets of two businesses are placed under the control of a single business. Among the most common scenarios are the following:

• The two businesses may merge into a single company pursuant to a merger agreement.
• One business may acquire the other pursuant to a stock purchase, buy-sell agreement or other type of purchase and sale agreement.
• One business may dissolve and transfer its property, contracts, goodwill and other assets to the other business through an asset sale.
• A financial interest, or control of an LLC may be accomplished through a Membership Interest Purchase Agreement (MIPA), or through an Asset Purchase Agreement (APA). What is the difference?

Which scenario is advisable for your situation depends on many details about the types of businesses and assets involved, as well as the goals of the transaction.

Mergers Can Take Many Forms in San Diego and Southern California

Mergers can represent an incredible opportunity for the entities involved, or they may pose a challenge for minority shareholders who are concerned about the power and value of their position.  Generally speaking, when two companies merge both receive stock in the new entity which establishes not only the distribution of income or dividends but the power to vote and make decisions.

In a “Horizontal Merger” two entities with similar business interests who may or may not be competitors merge into a single entity.  In a Vertical Merger the entities are usually part of a supply chain together (i.e. supplier and customer) who seek to reduce costs and increase operational profitability.  There are as many reasons to merge as there are mergers each year in Southern California and across the United States. 

In essence, the intent of a merger is usually to combine forces in order to increase reach and profitability in a way that neither entity could do if they remained separate.  In other situations, market contraction and/or competition may drive local entities to join regional powers, and ultimately regional powers to consolidate into national or international entities.

Our successful mergers and acquisitions attorneys assist California clients with all aspects of asset and stock purchase M & A transactions, including drafting purchase and sale agreements, handling all escrow and due diligence issues, pre and post closing of the transactions, and the liquidation and winding up of business entities slated for dissolution.

Experienced San Diego Asset Purchase Agreement (APA) Lawyers

Purchasing the assets of another company through an asset purchase contract is one of the most common forms of acquisition in San Diego and Southern California.  An asset purchase contract allows one entity to sell some or all assets of their business.  In an asset purchase there are several important aspects of the transaction that require detailed attention and anlysis, including but not limited to:

• Identification including serial, manufacturer’s or other identifying numbers
• Disclosure and verification of the condition of the asset(s)
• Evaluation and/or removal of underlying encumbrances and resolution of liens
• Elimination of successor liability claims
• Transfer of clear title to specified assets

Minority shareholders may genuinely object to the sale of an asset or an asset purchase transaction.  Does the seller have the right to convey the asset(s) in question?

The Watkins Firm works to ensure the asset purchase contract protects our client’s interests.  We discuss additional precautions such as the protections of a cash transaction as well as appropriate insurance.

Due Diligence is the Key to a Successful Stock Purchase

Why is due diligence the key to a successful stock purchase transaction in San Diego and Southern California?  During a stock purchase the buyer usually acquires all or a substantial and controlling interest of the stock of a corporate entity from it’s stockholder(s).  The legal intention of a stock purchase is to allow the buyer to “step into the shoes of the seller.”

A stock purchase agreement allows the buyer to acquire and control an existing or operational entity and all existing employees, customers, intellectual property, inventory, facilities, equipment, real estate and contracts.  There are often no visible changes from the outside perspective during a stock purchase transaction.  The intent of all parties is usually to ensure the smooth transition from seller to buyer preserving and/or enhancing existing goodwill, sales and key employees.

The stock purchase transaction is a complex legal, financial and operational business transaction.  This is why it is important to work with the proven, experienced mergers and acquisitions attorneys at the Watkins Firm.  We have helped our clients to successfully complete thousands of these transactions across almost four decades of service to the Southern California business and medical/healthcare communities.

Due diligence in a stock purchase is extensive.  The Watkins Firm has developed a comprehensive series of checklists and processes to guide our clients through the transaction while protecting their interests.

Mergers and Acquisitions transactions can prove to be a tremendous business opportunity for both parties.  There is a substantial amount of information which must be disclosed and verified. Genuine risks are present at every step of the process.  A well-crafted stock purchase agreement or asset purchase contract guides our clients through the transaction and in the crucial period which follows.  This allows for contingencies to be anticipated and either avoided or resolved.  It ensures goodwill and the success of the business and it’s employees transfers smoothly.

Are you considering a stock purchase transaction in San Diego or Southern California? 

We invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.

Membership Interest Purchase Agreement or MIPA

Are you considering selling your interest in a Limited Liability Corporation or LLC?  Are you working to purchase a membership interest in a small San Diego or California business? LLCs are owned by their “members.”  If one intends to purchase an ownership interest in an LLC, or the entire LLC itself, the transaction should be governed by a Membership Interest Purchase Agreement or MIPA.

California is arguably the most complicated, regulated and legally complex states in which to do business.  Our extensive regulatory environment and Commercial Code add substantial risk to any MIPA transaction.  This is why it is important to work with the experienced M&A attorneys at the Watkins Firm.  You want and need our 40+ years of experience serving the business, science and tech, real estate and medical / healthcare communities here in San Diego and across California on your side of the equation.

Which is better for your unique situation, a MIPA or an Asset Purchase Contract or APA? What are your goals for this transaction?  What are your concerns?  What should you be concerned about?  It doesn’t matter if you are selling your membership interest, or acquiring a membership interest or the entire LLC, you need sound advice and counsel at every step of this important business transaction.  Your Watkins Firm attorney can quickly, efficiently, and cost-effectively customize a detailed MIPA contract from our proprietary library of proven, battle-tested contracts.  We work to protect our client’s interests while facilitating a smooth, successful transaction.  

We invite you to an initial conversation that is substantive, thorough and complimentary.  Your Watkins Firm experienced mergers and acquisitions attorneys will help to answer your questions, and ask others you may not have yet considered.  We will protect your interests and investment while working to maintain a positive atmosphere and working relationship with all parties throughout your MIPA transaction.

Contact Experienced California Mergers and Acquisitions Lawyers

Mergers and acquisitions of business entities in California can be extremely complex legal and financial transactions. Your choices regarding which process to follow, due diligence and effective transactional contracts and documents can have a substantial impact on the timeliness and success of the merger, asset purchase or stock purchase.

Our experienced mergers and acquisitions attorneys will protect your interests while providing sound counsel and guidance at every step of the transaction.   You can place your trust in the Watkins Firm for any merger, asset purchase or stock purchase opportunity.  We have more than 40 years of proven experience facilitating complex business purchase and sale transactions.

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 substantive, complimentary consultation today to discuss how we can help you achieve a positive outcome in your transaction.