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The Merger and Acquisition (M&A)
arena combines many services and is an exciting area of involvement for
our firm. Mergers and acquisitions allow us to use our talents in
many different areas, often combining The Burns Firm, Ltd. services discussed
in more detail below.
A major step in any purchase, sale or merger is
determining the value of the business(s) involved. Buyers need to
know how much to offer for a business, sellers need to know how much to
ask for their business, and merger partners need to know the respective
values of their business before all the parties can come together. In
many cases, we act independently in valuing a business to assist in bringing
buyers and sellers together.
Many purchasers and/or merger partners require
the seller or merger partner to have audited financial statements for at
least one year and in many cases several years. This provides the
purchasers and/or merger partner with a level of confidence in the financial
statements from which they may be making their offer and will be basing
their business plan.
Most purchasers and/or merger partners require
certain due diligence procedures to be performed prior to closing their
deal. These procedures vary dramatically depending on the particulars of
the transaction. Some typical procedures include: search for unrecorded
liabilities, review of tax returns to determine outstanding taxes payable,
review of corporate stock and minute books, lien searches, and review of
lease documents. We will also review employment contracts, purchase
commitments, and other contracts, review the business plan, analyze the
accounting systems and cost control systems, and confirm the term and status
of loan agreements. We help establish the most cost effective due
diligence procedures necessary, and act as the catalyst to completing them.
The structure of any deal is critical. We
can help establish the best structure for a transaction to achieve the best
tax and economic results. There are numerous complicated tax laws
relating specifically to purchases, sales, mergers and liquidations, and
a wrong choice can result in a larger current tax liability and/or an ongoing
tax cost.
There are also many non-tax issues that need
to be dealt with in structuring a transaction. These might include
various accounting requirements, carryover of seller's liability to purchaser,
personal liability of purchaser and seller to outsiders, and satisfaction
of investor's/lender's requirements. Buyers, sellers and/or merger
partners all need to know how a particular structure will affect them.
We can assist in evaluating all of these issues and help design
the appropriate structure.
It is imperative that purchasers and merger partners
know how the business will operate after the transaction is complete. They
also need to know that future goals are attainable. Such issues as
adequate cash flow to service acquisition debts and pay dividends and profitable
operations need to be addressed. We can assist in preparing realistic
forecasts and projections to explore these issues and satisfy outside lenders
and/or investors as to the viability of the project.
"As anything, the more experience one has the
better they are and visa versa. We have been involved in literally hundreds
of acquisitions and sales of businesses over the past 15 years. We almost
always can determine a tax efficient way to save thousands of dollar payable
to the IRS. Mr. Burns has spoken at conventions with the Texas Association
of Business Brokers and the International Business Brokers Association in
Texas and around the country. Ask us about some of our "war" stories in
completing difficult transactions and in saving buyers and sellers thousands
of dollars."
At Burns & Company, P.C., we are prepared to utilize all of our
resources to assist in making your purchase, sale or merger a success. We
are experienced in representing buyers, sellers and merger partners in all
aspects of the process, and work closely with the other professionals (brokers,
attorneys, credit officers, etc.) on your team.
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