Business Lawyers Blog
Mergers offer many Texas businesses the ability to quickly expand their operations. But mergers are also a complex undertaking, even when the companies involved may still be relatively small in size and scope. That is why it is always important to work with an experienced Texas mergers and acquisitions lawyer who can guide you through these transactions. The team at Structure Law Group represents clients in M&A deals at all levels and values, and we can help to ensure that your Texas merger is a success.
While every Texas merger presents its own unique challenges, here are a few basic principles to keep in mind when planning for a successful deal:
Make Sure Your Business Is Ready
A merger represents a significant change to the structure and day-to-day operations of your business. So it is critical that you take the time to assess your business to ensure it can thrive under these new conditions. This includes assessing your current liquidity and capital structure. Keep in mind, many mergers require additional funding, which often takes the form of a loan or taking on other debt. Can your Texas business handle these liabilities without a significant impact on post-merger operations?
Merge for the Right Reasons
A Texas merger should never be an “impulse” buy. Some companies make the mistake of entering into an acquisition because the price seems too good to be true. And in most cases, it is. So it is crucial that you define your objectives before starting to negotiate a potential merger. There should always be a solid business reason beyond simply wanting to make a deal.
Do Not Skip Due Diligence
Along these same lines, a company must always take the time to thoroughly vet any potential merger partner or acquisition target. This often requires a significant outlay of time and money. But it is worth it. When it comes to doing your due diligence, you do not want to take shortcuts or rush the process along simply to get a deal done quicker. The last thing you want is to discover a potentially fatal problem after the deal is done.
Protect Yourself If the Deal Goes South
Not every announced Texas merger comes to pass. Deals can fall apart even after the parties sign on the dotted line. This can happen for a number of reasons, such as problems obtaining necessary regulatory approvals or one company’s shareholders refusing to approve the deal. It is therefore necessary to ensure adequate protections for both sides if the merger is never completed, including a breakup fee and non-disclosure agreements.
Have a Transition Team in Place
The time to start planning a post-merger transition is before you sign the final agreement, not the day after. Both sides need to identify key executives who take responsibility for integrating the companies once the deal is made. This transition team must take charge of integrating not just the company’s technical and business infrastructure, but also their respective cultures.
Work with a Qualified Texas Mergers & Acquisitions Lawyer
No matter the size of the companies involved, a merger is a big step for both sides. You will need experienced counsel to help make your Texas merger a success. If you need to speak with an attorney who specializes in mergers in and around Austin, contact SLG today at (512) 881-7500 to schedule a consultation.