The Houston, Texas, mergers and acquisitions attorneys at Murray Lobb have decades of experience helping Texas corporations grow and expand their operations.
In this article, we will discuss how a mergers and acquisitions attorney can provide detailed, thorough advice on all aspects of these complex transactions, including:
- Planning and preparation for the transition,
- Negotiating agreements and drafting documents,
- Due diligence and ESG considerations,
- Tax implications, and
- Human resources considerations.
What are Mergers and Acquisitions?
Although we often refer to the process as “mergers and acquisitions,” the two terms are not interchangeable – what do we mean by a “merger,” and what do we mean by an “acquisition?”
In a merger, two separate entities are combined into one new legal entity. For example, AA Tax Services and AA Accountants may be two businesses of comparable size and worth that have determined they will be more effective and profitable if they combine their operations.
When they merge, they become a single new entity, AA Accountants and Tax Services.
Acquisitions are more common than mergers. In an acquisition, the acquiring company purchases all or a majority share of the target company’s ownership stakes, giving the acquiring company control over the target company’s stocks, assets, and operations while both companies retain their separate corporate identity.
For example, AA Tax Services might acquire AA Accountants, taking control of their operations without forming a new, separate corporate identity.
What is a Mergers and Acquisitions Attorney?
The corporation’s M&A attorney provides counsel and transactional services to ensure this process proceeds as smoothly as possible, helping the company to navigate the complexities of corporate mergers or acquisitions like planning and preparation, negotiating the terms of the transaction, drafting contracts, tax implications, and due diligence including ESG considerations.
How can Your Mergers and Acquisitions Attorney Help?
Your mergers and acquisitions attorney’s job is to ensure that the consolidation of the companies and their assets runs as smoothly as possible, minimizing the risk of unnecessary litigation, confusion, loss of profits, or loss of valuable personnel.
Your M&A attorneys on the Murray Lobb team have extensive experience in corporate law, mergers, acquisitions, and other high-stakes transactions for all types of Texas business entities including corporations, LLPs, LPs, and other corporate entities.
Planning and Preparation
At the outset, your mergers and acquisitions lawyer can help you to create a timeframe and deadline for each stage of the process, preventing the loss of time and resources by keeping the transaction on schedule.
Negotiating and Drafting Agreements
Another critical service provided by your M&A attorney is negotiating, drafting, or reviewing all documents and contracts related to the transaction. Depending on the nature of your business and transaction, this could include:
- Letters of intent,
- Sales agreements,
- Agreements for the purchase of assets or stocks,
- Partnership or corporate dissolution,
- Employment agreements,
- Shareholder agreements,
- Protection of or transfer of trade secrets and intellectual property rights,
- Confidentiality and non-disclosure agreements,
- Corporate restructuring,
- Transition services agreements (TSAs),
- Formation of new corporate entities,
- Disclosure schedules, and
- Closing documents.
Any merger or acquisition will have implications for the companies’ tax liabilities. Your M&A attorney can provide advice and, in conjunction with your business’s tax professionals, help you get your paperwork and finances in order for tax season – avoiding unnecessary tax liabilities and penalties.
Due diligence in any high-stakes transaction like corporate mergers or acquisitions must be thorough and detailed.
Although every potential issue uncovered is not necessarily a deal-breaker, you must identify the risks and liabilities and determine whether 1) they cannot be mitigated or avoided (and, therefore, the merger or acquisition may not be a good idea), or 2) they can be resolved before closing or minimized through contractual clauses like indemnities, representations, warranties, or pre-closing covenants.
Due diligence is tailored to the unique situation of each corporate transaction, but common elements include:
- Review of corporate documents including articles of incorporation and amended articles, operating agreements, shareholder agreements, and organizational charts,
- Corporate finances including tax documents, financial statements, budgets, accounts payable and receivable, and other financial documentation,
- Government and regulatory compliance including whether there have been any audits, investigations, or threatened action by enforcement agencies,
- Supply contracts, material contracts, employment contracts, vendor lists, and client lists,
- Insurance contracts and claims that have been filed,
- Net promoter scores (NPS),
- Internal policies,
- Employee satisfaction ratings,
- Market share and competition,
- Employee compensation and benefits,
- Non-disclosure and confidentiality agreements,
- Credit history and existing banking arrangements,
- Leases and other contracts regarding real estate or other assets,
- Intellectual property rights,
- And ESG considerations.
Mergers or acquisitions usually come with a great deal of stress and uncertainty among the employees and officers of both companies, which can result in upheaval among the businesses’ personnel who may be speculating about upcoming terminations, demotions, promotions, new job descriptions, or other staffing changes.
Many considerations need to be addressed by your human resources department, including:
- Reconciling the organizational chart – for example, you don’t need two CEOs,
- Pay scale and benefits reconciliation among the employees of each company, and
- Communication – how effective communication of high-level strategic objectives (i.e., we have a plan!) can help with employee satisfaction and increased retention, yielding stable productivity through the merger or acquisition.
Bank Mergers and Acquisitions
Murray Lobb attorneys have extensive experience navigating the complex laws that govern the banking industry, and our M&A attorneys are well-situated to handle complex mergers and acquisitions on behalf of our banking industry clients.
Several decades ago, Murray Lobb was formed specifically to provide legal services to banks, and we regularly provide counsel to banks including:
- Mergers and acquisitions,
- Lending transactions,
- Loan documentation including SBA, foreclosures, forbearances, modifications, bankruptcy, and restructuring matters,
- Loan agreements, promissory notes, and security agreements,
- Disputes and litigation,
- Consumer financial affairs,
- Specialized SBA loan packages, and
- Other banking-specific needs.
Please feel free to contact one of our Murray Lobb attorneys to obtain our legal advice regarding your company’s merger or acquisition. We also remain available to help you with all your general business, employment, and estate planning needs.