Cedar Rapids Merger and Acquisitions Attorneys
Cedar Rapids merger and acquisitions attorneys are prepared to help businesses become more successful through the process of merging with or acquiring other companies. Because of the large structural change that mergers and acquisitions entail, complex business and legal requirements must be met during these transactions. An experienced business law attorney can help you smoothly traverse the legal and regulatory requirements of a merger or acquisition.
At Arenson Law Group, PC, our Cedar Rapids Merger and Acquisitions attorneys understand the complexity of merger and acquisitions transactions and how frustrating the legal requirements can be for companies. As you consider going through with a merger or acquisition for your business, it is important to enlist a competent legal team to protect your interests during these processes. Contact us at (319) 363-8199 to learn more about how we can help you.
Do I Need a Mergers and Acquisitions Lawyer?
If your company is considering a merger or acquisition, you are probably aware that it is a complex process with multiple facets, which include complicated transactions, due diligence, and tax implications. A merger or acquisition has broad effects throughout the two organizations that are becoming a single company through the process. All stakeholders, including owners, executives, employees, and even customers will likely find that circumstances and practices in the new company are different from the previous companies’ practices.
An attorney experienced in the complex processes of completing mergers and acquisitions is a necessity when your business decides to form a new company by merging with, acquiring, or being acquired by another company. Even prior to making a formal decision on a merger or acquisition, it is best to have legal counsel and representation; sensitive data may need to be exchanged between companies for both to decide to move forward. An experienced mergers and acquisitions lawyer will assist you and your business in structuring and completing the set of transactions that are best for your situation.
Why Choose Arenson Law Group, PC to Handle My Case?
Selecting an attorney to assist you with a merger or acquisition transaction is a critical step in the process. An experienced attorney will be able to anticipate issues and stay ahead of the curve when it comes to proceeding through each phase of the process. At Arenson Law Group, PC, we understand the needs of business owners to complete mergers and acquisitions with as little hassle as possible, and we strive to help ensure that the transition is as seamless as possible.
Arenson Law Group, PC’s managing member, James Arenson, has a wealth of business experience after successfully operating and being the franchise-holder of Chevrolet, Mercedes-Benz, and Volvo franchises for over two decades. As a result of those and other relevant experiences, he understands the challenges that business owners face. Mr. Arenson has assisted numerous clients with mergers and acquisitions, and he is dedicated to providing top-notch, timely counsel. He has earned an AV Preeminent Peer Review (4.6 out of 5) rating on Martindale-Hubbell, a peer rating system that recognizes lawyers for strong legal ability and high ethical standards, a distinction given to only 10 percent of practicing attorneys.
The attorneys at Arenson Law Group, PC take the issues of their clients seriously and are prepared to handle each step of the process in a proposed merger or acquisition. You can feel confident when you place your business in our hands knowing that Arenson Law Group, PC has the knowledge and skill to represent your interests effectively. We care deeply about protecting your sensitive business information and obtaining the outcome you desire.
Mergers vs. Acquisitions
Mergers and acquisitions are frequently spoken of together, almost as if they are the same thing. However, mergers are distinctly different than acquisitions. The differences are discussed below:
When two separate companies combine to form a single company, it is referred to as a merger. Common types of mergers include:
- Conglomerate: Two companies with no business commonalties combine.
- Horizontal: Two companies that directly compete with each other combine.
- Vertical: A company and its customer or a company and its supplier combine.
- Market-extension: Two companies selling the same product in different markets combine.
- Product-extension: Two companies selling different products that are related combine.
It is rare that two companies that are truly equal combine and one is not determined to be the acquiring company. When this does occur, the two combined companies will typically have equal representation on the board of directors for the newly formed company, and new stock will be issued to shareholders. At times, even though a company is really acquiring another company, the process is referred to as a merger to appease stakeholders.
When one company acquires another, it is referred to as the acquirer, and the company being acquired is known as the target. There are two ways in which a company may acquire another:
- Equity or stock purchases: The acquirer may purchase all of the shares of the target company from the shareholders, resulting in the acquirer taking control of all of the assets and liabilities of the target company. A stock purchase acquisition may be more complicated when there are more shareholders from whom to purchase stock.
- Asset acquisition: This occurs when the acquirer purchases all or a substantial amount of the assets of the target company. Assets can include equipment, inventory, real estate, stock, and other items used to do business. In this type of transaction, the acquirer does not need to take on all assets or all liabilities of the target company, which can help avoid unwanted obligations.
Regardless of the type of merger or acquisition you are considering, an experienced mergers and acquisitions attorney can assist you in preparing for and completing the process in the most effective way possible.
Steps of Mergers and Acquisitions
Despite some ideas or intentions of business owners, mergers and acquisitions ultimately must pass all of the regulatory and legal requirements before they are finalized. Steps involved in mergers and acquisitions include:
- CEOs and top-level management decide to merge with or acquire another company
- Make an offer to the target company
- Pass regulatory requirements
- Close the deal
- Pay any taxes associated with the transaction
This is a general outline of what a basic transaction includes, but many cases are highly detailed and specific. A business law attorney can help companies through this complex transaction in order to eventually produce a stronger, more financially successful business.
Frequently Asked Questions
How Long Will an Acquisition Take?
There is no hard-and-fast timeline for the acquisition of a company. The time the acquisition takes will largely depend on how motivated you, as a buyer, are. If your business is acquiring an entity with a considerable amount of paperwork and assets to sort through, then the due diligence process will, naturally, take more time.
It is not uncommon for an acquisition to take four to six months, but, again, each situation is different. The legal work surrounding an acquisition must be done in a timely manner, and our attorneys are committed to making sure that the job is done correctly.
What Does the Due Diligence Process Entail?
The due diligence process is crucial to ensuring that you know what you are getting into when you merge with or acquire another company. A mergers and acquisitions legal team will take a close look at key documents regarding financials, taxes, litigation, employee records, contracts, insurance, government regulations, disclosure information, marketing contracts, and advertising arrangements, as well as any other information that is pertinent to the ongoing business of the company.
The due diligence process typically takes about two months. For the process to be completed in a timely manner, however, the seller should make their documentation available to their buyers as soon as possible. Of course, this process can take longer depending on the size of the company and the speed at which they make the necessary documents available.
How Can A Lawyer Help with Employee Affairs During an Acquisition?
Depending on your company’s goals, a merger or acquisition may mean adding some new employees to your payroll. If this is the case, during the due diligence process, your lawyers will be able to gather information regarding salary, health benefits, retention benefits, vacation time, sick leave, adherence to FMLA, and employee classifications, as well as other issues. Understanding who you are acquiring and how this business transaction will affect them is crucial to onboarding.
Mergers and acquisition lawyers will also be able to assist you if you plan to acquire a company without retaining their employees. In assessing severance agreements and layoffs that your company will be making due to the acquisition, you will have a more complete understanding of the final agreement.
What is the Importance of an Acquisition Agreement?
Based on all the legal work completed with the goal of acquiring a new company in mind, your lawyers will draft an agreement outlining important terms. This agreement sets the terms for the process of the acquisition (which are often included in the price of purchase), how the transaction will be structured, milestones for the acquisition, closing conditions, stock information, and other important information. The acquisition agreement is what both you and the company that you are acquiring will ultimately sign.
Talk with a Mergers and Acquisitions Attorney in Cedar Rapids
Deciding to expand your company through a merger or acquisition is an exciting prospect for the growth of your business. During the process, enlist the assistance of the Cedar Rapids business law attorneys at Arenson Law Group, PC if you need assistance in Iowa, Wisconsin, or Minnesota; we will protect your interests and guide you through the necessary regulations and legal steps. Contact us at (319) 363-8199 today to speak with a mergers and acquisitions attorney about your business’s future.
Written by James H. ArensonLast Updated : December 3, 2021