Expert Insights On Mergers & Acquisitions In Arizona: Comprehensive Guide

How Arizona Businesses Can Leverage M&A For Rapid Growth & Success

If you are considering merging or acquiring another business, you may have a lot of questions. Whether you’re a large company or a small one, mergers and acquisitions can be a helpful direction to take in order to satisfy several different kinds of company goals.

If your merger or acquisition goes wrong, however, your business could run into many problems, even including litigation. Arizona business lawyers can help you navigate the complexities of business acquisitions or mergers to ensure you follow all the guidelines and enter into an agreement that you understand and benefits you in the long run.

Mergers, Acquisitions & Consolidations Explained

The term mergers and acquisitions (M&A) is used to explain what happens when two businesses come together or one business acquires another business. In addition to mergers and acquisitions, the term “consolidation” is sometimes used. Each of these words is used in different circumstances:

Merger: A merger happens when business A and business B come together as one entity. This happens when business A takes on all of business B’s assets and liabilities and business B closes down. From here, the business can come up with a new name that better reflects the merger. Or they may choose to keep one of the names in order to keep brand awareness.

Consolidation: A consolidation is similar to a merger, but instead of business A taking on business B, both businesses combine, taking on the assets and liabilities of both. Consolidation can often benefit the businesses by increasing profit and allowing cooperation.

Acquisition: An acquisition happens when business A buys all or part of business B’s stock and/or assets. An acquisition is more likely to be done under negative circumstances that involve some kind of conflict, but many times that is not the case at all. When an acquisition happens, business A’s structure does not change, but business B is dissolved.

What Documentation Is Needed For a Merger & Acquisition?

When going through an M&A, an Arizona business lawyer will help create a merger and acquisition agreement that details all of the pertinent information, decisions, and legalities. This agreement should include:

Business Details: Names and details of the buyer and seller as well as a description of the business being acquired or merged.
Stock and/or Asset Purchase: The agreement should specify which stocks and assets are being purchased as well as details on how the transaction will happen.
Liabilities & Assets List: In an acquisition, the list should come from the business that is being bought. In a merger or consolidation, the list should include assets and liabilities from both businesses.
Financial Information Access: There should be details on how much information will be shared regarding financial information during the due diligence process.
Other Pertinent Terms: There may be other terms the businesses may include in the agreement that an Arizona business lawyer can help determine depending on your specific business situation.

Is a Merger & Acquisition For Small Businesses In Arizona?

Mergers and acquisitions are often seen in large businesses, but they can be just as beneficial for small businesses. If you have a small business, you may consider the following reasons to do a merger and acquisition:

Growing Your Market- If you are looking for a growth opportunity as a small business, a merger or acquisition could be for you. In either situation, you will be combining with a company that has a market that you may not have reached. You will potentially be able to combine resources that allow your business to grow immediately instead of having to build something from the ground up again.

Growing Profit- Combining small companies can allow profit to go up! Afterwards, you can grow your production output by considering a reduction on labor costs and putting that savings into your materials and/or supplies.

Updating Your Business- Some small businesses may fall into an inability to keep up with technology or the quickly growing market. In this case, they may benefit from finding a business willing to acquire it or merge. This allows your businesses losses to stop and potentially allows you to collaborate with another business.

Grow The Financials- If your small business is struggling in the financial department, you could consider a consolidation which combines the financial resources and provides new investment opportunities for you.

While an M&A can be beneficial for your small business, the decision to do so has many implications that should be understood. Contact an Arizona business lawyer to make sure you are making the right decision for your small business.

Things To Consider Before Entering a Merger & Acquisition Agreement

Considering the goals of your small business is the first step before entering into an M&A agreement. You want to make sure your business will experience benefits from the M&A. There are several more considerations that you should keep in mind when pursuing a merger or acquisition:

Look into how much the business you might be acquiring or merging with is worth. You can do so by requesting a business appraisal.
Ensure that the business you are entering into a M&A agreement with is in good standing and has no litigation and that they are valid in Arizona.
Consider the culture of the business and how you will combine the cultures of two businesses to ensure a smooth transition.
Check on the intellectual property assets of the business you are entering an agreement with. Look for trademarks, copyrights, or patents.
It’s important that if a business does anything in foreign countries, that you check and make sure the dealings are all above board and not done with any banned companies or individuals. Also, be aware of the ramifications of the Foreign Corrupt Practices Act, which prohibits bribery and other types of inappropriate deals with entities in other countries.

Regardless of whether your business is large or small, merger and acquisitions can be complicated and take some time. The process can include a significant amount of due diligence and it is wise to contact an Arizona business lawyer to walk you through the process.

Get In Touch With Experienced & Trustworthy Business Lawyers!

Mergers and acquisitions can be a fantastic strategy for growth, but with all the legalities, you may want to consider a Top-Rated Arizona Business Lawyers. At Denton Peterson Dunn, our attorneys want to help you. They have a comprehensive knowledge of Arizona law and want to make sure your merger or acquisition goes smoothly.

Contact us today by filling out our online form and get in touch with experienced lawyers you can trust.

Brad Denton – Denton Peterson Dunn