The essence of a skillfully drafted deal is that it protects the client’s legal interests while simultaneously achieving the most optimal financial benefits for the business. Meeting this goal requires a law firm that recognizes the unique features of each business deal, and then adroitly applies the law to the specific nuances of the transaction. Capstone Legal Strategies combines its extensive legal knowledge with the experience that only comes with successfully managing a diverse array of business deals.
Our Approach to Deal Structuring
Successful business deals are never the product of happenstance. They require an appreciation of the transaction’s complexity, patient negotiation among the parties, and diligent legal practice. Our firm treats each client with a personalized approach that looks to minimize risks and maximize the client’s profits and financial position. More specifically, we assist with the following tasks:
Deal Analysis
We begin by meeting with the client and its leadership to gain a better grasp of the details of the proposed deal. For instance, the business may be attempting to merge with another company. By conducting a preliminary review and assessment of the transaction, including its potential advantages and disadvantages for the client, we can review the client’s options for properly structuring the deal.
Our objective is also to understand what the client hopes to ultimately achieve and then implement the steps needed to achieve it. This may include any combination of the following factors, among others:
- The highest possible return on investment
- Increased revenues and profits
- Improved operating efficiency
- Expansion into new markets and territories
- Stronger relationships with third parties and stakeholders
- Enhanced market position
- New product and service offerings
- Economies of scale
Communication and Negotiation
Every deal requires a reliable line of communication between the parties, which should begin sooner rather than later in the process. Again using the example of a merger, one of the first steps will be to gauge the target company’s interest in consummating a deal. It is expected by this point that the parties have at least begun informal communications on the subject, but if not we can open those discussions or help you understand how to begin those discussions.
This step leads naturally to the initial round of negotiations between the parties. The purpose of these exchanges is to determine the contours of the nascent deal and start focusing on the areas that will require the most intensive deliberations. Assuming productive negotiations, the client, through counsel, will issue a letter of intent to the target company or proffer a recommended contract or agreement.
Risk Management and Due Diligence
There are legal and financial risks inherent to any transaction, none of which are absolutely avoidable. Even the most carefully negotiated deals could expose a business to liability and losses. The role of a business attorney is to help the company understand the degree of risk involved so it can weigh its options and adjust the deal accordingly.
Prudent risk management involves some aspects of due diligence. Generally, this refers to a thorough evaluation of the financials involved in the transaction, potential litigation, employee issues and other potential issues. More specifically, for example in the mergers and acquisitions (M&A) context, it could involve a comprehensive review of the other party’s liabilities and assets. Regardless, risk management and due diligence are aimed at reducing the likelihood of adverse legal action and better understanding the commercial potential of the deal.
Regulatory and Legal Compliance
This is where retaining qualified legal representation will especially be vital to the deal’s success. Depending on the client’s industry, there could be myriad compliance hurdles that must be cleared before the deal can close. For example, banking and securities are some of the most heavily regulated economic sectors in the country. Your attorney should not only have working knowledge of the relevant rules, regulations, and court decisions but should be prepared to develop a strategy for structuring a deal around them.
An integral facet of compliance is securing the governmental approvals that are required before the transaction can move forward. For example, the Federal Trade Commission and U.S. Department of Justice share jurisdiction over mergers. Other deals, such as contracts, should be thoroughly reviewed so they do not impose upon the client an obligation that is not permitted by existing laws and regulations.
Structuring the Deal
Incorporating the above information, the client next needs to consider the right structure for the deal. For M&As, there are various options like stock purchases and asset purchases. Other deals, like buy/sell agreements and purchase contracts, should be developed with an eye towards risk mitigation and an understanding of the client’s rights and obligations. Apart from these legal considerations, however, the client’s business needs must be paramount. To that end, we take steps to optimize:
- Value creation and preservation
- Operational stability
- Client and customer retention
- Human capital and talent acquisition
- Efficient use of client resources
- The company’s existing culture and values
- Long-term success and additional opportunities
Confidentiality and Nondisclosure
Business deals necessarily involve the sharing of information between the parties. At worst, a nascent deal could collapse; but even if the transaction succeeds, the client needs assurances that information it has exchanged with the other party is not exploited for any inappropriate purposes. A non-disclosure agreement is one tool that can govern all stages of a business transaction and provide the client with peace of mind that its confidential information will not be exploited.
Financing
The client’s deal may need substantial financing to achieve the desired outcome. We understand which lenders or investment strategies will be needed to reach this goal. Financing often requires negotiations with banks and other institutions to attain the best terms for the client. As your deal progresses, its exact financing needs will come into focus and allow us to reach an agreement for the funding necessary to move forward.
Deal Closing and Post-Transaction Obligations
Closing is the final stage of the deal itself, but the beginning of post-deal integration and compliance. Once the conditions are in place for the transaction to be finalized, your attorney will review all paperwork, exchange any necessary funds, handle any required filings, and help ensure continued regulatory and contractual compliance. Mergers and acquisitions require significant integration work such as rebranding, reorganization, and sometimes restructuring the legal entity of the acquiring or newly formed business.
Contact Our Houston Deal Structuring Attorney
Capstone Legal Strategies is prepared to handle every step of your business deal, from its initial stages to post-deal duties. We take the time to respond to your questions and concerns while bringing to bear our considerable legal acumen to achieve the best possible deal for your organization. Reach out to us today to start on your transaction.