Phoenix Mergers & Acquisitions Lawyers

Arizona attorneys provide counsel in efficiently structuring M&A transactions

Whether your company is merging with another entity, acquiring another company or is being acquired, it will involve a complex transaction that must be carefully planned and executed. At the Law Offices of Donald W. Hudspeth, P.C., we represent major corporations, small businesses, investors and private equity sponsors in business deals in varied industries, such as financial services, technology, manufacturing and retail. A Phoenix mergers and acquisitions lawyer at our firm will guide you through all phases of the deal with an eye toward achieving your strategic objectives and protecting and furthering your economic position. 

Types of mergers and acquisitions

There are multiple ways in which control of a company and/or its assets can be shared or transferred. They include the following

• Merger and consolidation — Two companies combine into a single entity, with one surviving and the other dissolving. The surviving company retains all assets and liabilities.
• Stock transaction — Buying a business in Arizona usually involves acquiring the stock of the target company, taking on all assets and liabilities.
• Bulk sale — One company purchases most or all of another company’s assets, leaving the selling company’s ownership intact.
• Asset sale — The purchaser acquires specific assets of another company, like property, inventory or intellectual property.
• Leveraged buyout (LBO) — One company buys another company primarily with borrowed funds, with the acquired company’s assets used as collateral.
• Roll-up — This means acquiring and merging smaller companies within an industry into a larger entity.
• Spin-off — A company separates one of its divisions or subsidiaries into an independent company, whose stock is distributed to the parent company’s shareholders.

There are other methods by which companies can engage in profitable collaborations, such as joint ventures, strategic partnerships and restructuring of businesses. Each of these transactions requires extensive research, investigation and government compliance work, all of which depend on a deep understanding of the federal and state business laws that apply. 

The Arizona M&A process and the legal factors involved

Our attorneys have extensive experience handling all aspects of mergers and acquisitions. We are intricately involved in all of the vital aspects of stock or asset transfers, including: 

• Pre-deal strategizing — Tactical decisions must be made well in advance to determine the most advantageous type of transaction.
• Letter of intent — This non-binding document is an agreement in principle for a business acquisition, laying out the proposed price and other terms.
• Due diligence — The entity or group of individuals seeking to buy must make a comprehensive review of the target company’s financial situation. This involves thoroughly investigating the financial, legal and operational aspects of the target company. Due diligence identifies pending litigation, regulatory compliance issues, intellectual property rights and any outstanding liabilities.
• Confidentiality and no-shop agreements — The parties agree to keep the proposed deal undisclosed and the seller agrees not to solicit other potential buyers for a given duration of time.
• Contract — The contract allocates rights and responsibilities between the buyer and the seller and sets out detailed actions that each will have to take prior to or at the closing of the deal.
• Equity and debt financing — Raising money to fund M&A transactions often involves acquiring liquid funds beyond the acquiring company’s cash reserves.
• Government compliance — The SEC, FTC and other federal agencies place restrictions on certain M&A transactions, of which boards of directors need to be fully advised.
• Tax compliance — Most changes in ownership have tax consequences that must be addressed.
• Closing — Some deals close when each party completes their required actions and transfers funds, properties and documents. Some deals are not closed until a governmental authority approves them.
• Post-closing adjustments — There may be continuing obligations to fulfill after a deal is closed, such as compliance with non-compete or non-solicitation agreements.

Our experienced legal counsel will assist you in all aspects of your transaction from start to conclusion, dealing with any red flags that arise, and will continue to advise you post-transaction.

Employment and labor concerns with M&A

Changes in control often require reevaluation of management and staffing, including these issues: 

• Executive retention within the target company, including revised agreements
• Compensation and severance 
• Non-compete and non-disclosure agreements
• WARN Act provisions
• Changes to employee benefits

Careful attention to such issues is also important for maintaining morale and building a positive corporate culture.

Mitigating risk for a merger or acquisition in Arizona

M&As represent a significant investment of company resources in what could be a speculative venture. To mitigate risk, companies can employ several legal strategies, such as:

• Indemnity clauses covering undisclosed liabilities, misrepresentations or breaches of warranty by the seller
• Escrow accounts to hold part of the purchase price and to cover any future claims or disputes
• Warranties offering assurances from the seller to protect the buyer against hidden risks, such as undisclosed debts or pending litigation

Mechanisms should be put in place to resolve post-transaction disputes if projections do not materialize as expected.

Contact a proven business law firm for M&A guidance in Phoenix

The Law Offices of Donald W. Hudspeth P.C. in Phoenix represents companies of all sizes in M&A transactions throughout Arizona. Call 866-696-2033 or contact us online to schedule a consultation.