Acquisition, Simplified Process

M&A transactions is not fun as it may sound. Yes, we sit on the “big table”, wearing shiny suit and an endless supply of meals. But how the transaction works? is it an overnight process, or it may become the most boring period of your law career?

First contact will be both parties sign the confidentiality agreement (CA). There is a widely-accepted CA template, online. So lawyer’s work will be in minimum state, unless you want to bring a legal battle on the scope of confidential information. Some people need a high give, in the face, they say.

Later on, both parties will negotiate term sheet (if any). Term sheet cover the main following item:
-total consideration
-object to be acquired (stock or asset)
-no shop

What are the roles of lawyer in this process. Bear in mind that business people generally “hate” having to hire lawyer. They intend to make return for every cost the make. We do know that there is no expected return on paying legal fee.

If you are a junior associate, you need to focus to do the work you are asked to do (yes, it sucks) and to work as hard you can do. In other word, you are in the bottom of the work’s food-chain.

If you are a mid-level, try to be efficient. You may handle other project at the same time.

If you are senior associate, bless you guys. You need to be the most competent lawyer in the room. Structuring the deal is your main task.

If the deal is viable (economically), then both parties will negotiate definitive acquisition/sale purchase agreement. From this moment, lawyer’s work is already done 75%. You get to the negotiation table with a signed term sheet and due diligence reports. Lawyer’s job is to facilitate the deal by communicating what legal risks are worth taking and only fighting the unacceptable risk.

After the project is closed, you get back to your room, and there is a new file in your desk. Hey, we love the markets right?

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