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Contacts John Cook
Mid-Sized Privately Held Businesses
The mid-sized privately held business (valuation $5 million—$50 million) has been a mainstay of our acquisition practice.
Representing acquirors and disposers of these businesses is particularly challenging in the area of representations and warranties.
Ordinarily these companies do not file with the Securities and Exchange Commission, and so the acquiror does not have the advantage of a
publicly filed document describing the business.
Further, the structuring of these kinds of acquisitions often has a tax or regulatory aspect that mandates a stock, rather than an asset, acquisition.
Our ability to fashion representations and warranties in a beneficial way for our clients and to work creatively with indemnification, holdback and risk-allocation provisions makes us a good choice to carry across the finish line a transaction that has a substantial potential of stalling. In the course of getting to that finish line, mid?sized company acquisitions often present difficult, but solvable, issues:
Dispersed family ownership of stock, which requires a negotiation within a negotiation to fairly allocate risks and benefits.
The presence of show-stopper issues in the areas of potential pension liability, contingent liabilities and environmental liabilities that would not be material to a big-dollar acquisition or presented by a family business acquisition, but which hold a real potential of killing a mid?level transaction unless handled creatively and practically.
Sensitive issues regarding partial owner/manager's participation in future operations of the company and appropriately rewarding such participation.
Case Study
Mid-Sized Privately Held Business
The Problem
Client desires to buy a privately-held technology company that is owned by several individual and quasi-governmental shareholders, each
represented by separate counsel and each with differing abilities and willingness to indemnify the buyer after the closing.
The Solution
Bricker lawyers draft and negotiate a detailed purchase agreement deferring part of the purchase price while transferring control (and ownership) of the business at closing, enabling the buyer to evaluate the veracity of representations and warranties about the business until the final installment is paid, while reflecting the varying interests of the disparate owners (sellers) to the satisfaction of all parties.
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Additional Resources
Introduction: The Bricker Difference
Acquisition Experience by Dollar Size and Case Studies
Acquisition Experience by Industry and Case Studies
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