Optimal Deal Structure – M&A
- This topic has 4 replies, 5 voices, and was last updated 2 years, 9 months ago by
.
-
Posts
-
When negotiating an M&A transaction, there are many issues that should be addressed up front. typically, below alternatives exist for structuring a transaction:
1) stock purchase; 2) asset sale; 3) merger
It is important to recognize and address material issues such as: transfer of liability, third party consents, stockholder approval and tax consequences.
What do you think from a buyer or a seller’s perspective?
From the perspective of the buyer I would much rather it be an asset sale. Much less complicated and you can pick and you can negotiate what assets are brought over.
From a seller viewpoint, it seems stock selling having the simplest process in comparison of asset sale and merger. If I had a choice, I won’t be strict into the merger unless a good reason.
It will always be on a case-by-case basis. From a seller perspective, some considerations would be whether I would like to retain control of the business operation, whether there is any benefits from doing a merger (e.g. tapping on a greater platform from the buyer), or whether a simple asset sale is sufficient because the ultimate goal is just to cash out.
- You must be logged in to reply to this topic.
