Merger and Acquisition Advisors

Leading the sale or purchase of your next business

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Frustrated in his current position, running a company which provided significant returns for a venture capital firm and other owners, an entrepreneur conducted a search for a company to buy on his own. However, he had limited capital resources. After an intensive search, the entrepreneur decided to acquire a product line of a publicly-traded biotech company seeking to divest the line in order to focus on its core business. This type of target (often called a “corporate orphan”) can–and did in this instance–provide an exciting opportunity for buyers to acquire a business at a favorable valuation.

Understanding the seller had several other interested buyers at the table and was about to conduct an auction sale, the entrepreneur had to act quickly to close the deal. We helped negotiate the central terms, conducted due diligence, and reviewed financing documents and the purchase and sales agreement.

The central risk in this acquisition involved the condition of the seller’s thousands of machines that it leased to hospitals and clinics. In order to close speedily and avoid an auction, the entrepreneur decided not to evaluate the condition of the machines. Drafting detailed seller representation, warranties and associated remedies, we were able to protect the buyer, leading an expeditious closing without having to assume all of the risk on the machines. Post-close, the buyer was able to make favorable adjustments to the purchase price upon the discovery of defects in certain of the machines.

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