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Description

Mergers and buyouts of closely held companies are complex, multifaceted processes.

Agreeing on a valuation can be very difficult because there is no regular market of buyers and sellers and information on comparable sales is scarce. Closely held companies are typically structured to benefit a few shareholders, often members of a family, and require their financial statements to be normalized. There can also be substantial issues of liability, including successor liability in asset deals, requiring carefully crafted reps and warranties.

Confidentiality is often essential in these transactions as sellers try not to unsettle existing commercial relationships and employees.

This program provides a practical guide to major planning and drafting considerations in the mergers and buyouts of closely held companies.

Part 1 topics include:

• Confidentiality considerations in the sale and negotiation process
• Due diligence – financial, operational and workforce red flags
• Stock v. asset transactions and forms of consideration – cash v. equity
• Valuation of closely held companies in an illiquid market
• Use or of "earnouts" to bridge the gap in valuation