Many mid-sized business owners are considering selling their most valuable asset—the company they’ve spent years building from the ground up—because the mergers and acquisitions market is as hot as it’s ever been. However, there are a few mistakes that business owners who are selling their businesses frequently make. The following are some of the most common mistakes a M&A Attorney in Miami can help business owners avoid.
Lack of Forethought in the Due Diligence Procedure
At least six months before you go to market, you need to involve your advisors in the process. A competent legal team can identify and highlight potential problems before they arise, which will enable you to either fix them before the buyer arrives at the table or come up with a clear, concise explanation of why the issue isn’t an issue at all.
Not Enlisting the Help of M&A Experts
A successful deal depends on having financial and legal advisers with extensive M&A experience. M&A is a distinct field with its own pace, vocabulary, ideas, and principles to help you sell your most valuable asset. Although good advisors are pricey, hiring a subpar one will cost you far more in the long run.
Accepting an Offer without Having an M&A Attorney Evaluate It First
The buyer will submit a letter of intent (LOI) after a price has been determined. The LOI will contain some binding clauses, one of which is typically exclusivity. Before investing a lot of time and money, the buyer will typically want the seller to guarantee that the transaction isn’t being marketed to other purchasers. The buyer will therefore request that the seller consent to negotiating alone with the buyer. Even though neither party is required to complete a deal, that exclusivity will have legal standing. If a LOI only contains that, the seller has lost their best opportunity to secure advantageous transaction conditions. Once you agree to an exclusivity clause, the buyer has you locked up and off the market. You won’t realize what you’re missing out on until it’s too late.
If you or your business needs legal advice, contact a corporate law firm in Miami for help.