During its life cycle, a typical company enters into several key transactions. These can include debt and equity financings, an exclusive license of the company’s proprietary technology or an acquisition of the company by a strategic buyer. Before signing the “definitive agreement” for a key transaction, however,…
The most common exit for early-stage companies is acquisition by another company. Because early-stage companies by definition do not have a long history of revenue and earnings performance, it can be difficult for the buyer and seller to agree on valuation. The seller will argue for a…
The American Bar Association’s M&A Market Trends Subcommittee of the Business Law Section has just published its biannual Private Target Mergers and Acquisitions Deal Point Study. This edition of the Study analyzes 136 publicly filed transactions that closed in 2012. This is a valuable resource for those that are negotiating transaction terms as it provides some empirical data to inform what constitutes “market” for a particular issue.
The market for initial public offerings continues to heat up. Once your company has selected the managing underwriters for the offering and wants to begin the IPO process in earnest, an organizational meeting with management, the underwriters, counsel and possibly the auditors will be scheduled.
Founders and executives of mature private companies often underestimate the complexity and lead time of the initial public offering process. The right timing is crucial for a successful IPO so it is critical to be ready to go when the company’s results and capital market windows align.
Perkins Coie’s startupPerColator is kicking off a series to help founders contemplating an initial public offering, or an “IPO,” prepare for this extensive and often complex milestone in the life of their company. An IPO, is the result of a great deal of effort, coordination of resources and resolution of myriad legal and business issues. Below are a few tips on how to start preparing your company today.
Founders are often reminded, “great companies are bought, not sold” – emphasizing the importance of focusing on the business rather than the exit plan. True enough, but founders can help themselves through an early understanding the levers for buyers in their industry. Knowing that can help entrepreneurs position their companies for a successful sale – and it may also cause them to focus their startup in a different way.
Whether a financing, merger or other acquisition, or other major transaction, parties often outline the major provisions in a non-binding term sheet or letter of intent. A principal benefit of this approach it to help the parties identify major areas of disagreement early to avoid wasted expense on additional diligence and drafting of the definitive agreements.
The date of an agreement is an important part of most business transactions and M & A is no exception. Many acquisition agreements begin with an “Agreement between” the parties “effective as of” a given date. Does it matter if this effective date is prior to the date the parties actually entered into the agreement? And if so, is this ‘backdating’ problematic or even potentially illegal?
You’ve developed your idea into a business. It’s taken a lot of sweat and hard work, and there have been more than a few rough spots. Acquirers are now taking note and making inquiries. Maybe investment bankers are courting you. You have arrived!! Well, almost . . . .