Mergers and acquisitions (M&A) refer to the consolidation of two companies, and these agreements account for a significant portion of business transactions in the United States. In fact, the value of M&A deals in the U.S. amounted to roughly 170 billion U.S. dollars in August 2020. The number of M&A deals decreased only slightly due to the pandemic, with the overall number of M&A deals in the 12 months ending August 31, 2020, amounting to 12,123, down from 14,247 in the previous year. Of the large number of mergers and acquisitions transactions that take place each year, a great deal of them occur in the construction industry.
Undergoing a merger and acquisition can be complicated for any company, but when acquiring or merging with a construction company with ongoing projects, it can be even more complex. There is much to consider, including existing contract obligations, employees who may be part of a union, and ongoing legal issues or disputes. Because of this complexity, it’s recommended that you contact a merger and acquisitions attorney in Tampa with Cotney Construction Law.
In addition to seeking help from legal counsel, there are a few tips for a successful merger or acquisition during ongoing construction projects that you should be mindful of.
Tip 1: Keep Documentation of All Ongoing Projects, Contracts, and Relationships
Whether you are being acquired or you are the acquiree, it is of utmost importance to keep clear documentation of all assets, projects, contracts, and pending bids. You can break this into two sections:
- Analyzation: The first step to creating a succession plan, merger, or acquisition is to understand the details of your company. This includes reviewing the business documents, contracts, and any relevant estate planning documents. This process also allows the business owner to get their essential business records in order.
- Assessment: Many business owners’ perceived value of their business doesn’t align with its true value. By analyzing the company’s total assets, your attorney can provide you with a dependable business valuation. This helps avoid several pitfalls during a transfer, can improve business management, increase profitability, and determine the overall interest the owner should receive when establishing a succession plan.
It’s important to remember that assets in this sense can include both physical assets (equipment) and human assets (employees) who are key to keeping your business running, as well as their union statuses. You should also keep a running list of any disputes or issues that arise or have arisen during recent and ongoing projects. This will help the legal teams for both parties to better prepare and plan for the merger. This list should include any mechanics liens as well. A Tampa mechanics lien law attorney will discuss how these liens will transfer during the merger.
Tip 2: Communicate Clearly with Employees and Clients
Especially when you are in the middle of a project, it’s important to keep employees and clients in the loop about any merger and acquisition. Allowing employees to find out about the merger from news reports or press releases will lead to frustration and fear. Meanwhile, allowing clients to learn about your merger through third parties can create distrust and cause potential issues with your project. An acquisition attorney in Tampa will be able to draft communication for clients and employees alike, sharing only the important legal details to keep everyone informed without divulging too much private information.
Tip 3: Commit to Company Culture
If your construction business has been known for a certain culture, it’s important to commit to keeping that culture in any ongoing projects throughout the merger. For example, if your company is known for having a culture of kindness and giving back to local charitable organizations, you should continue to participate. If your company culture is laid back, commit to keeping that. This is helpful for creating a sense of stability in both clients and employees. Mergers can feel like an uncertain time for many, so committing to the identity of your business is crucial.
Tip 4: Create a Contingency Plan
An attorney familiar with mergers and acquisitions law in Tampa can meet with the owner and any key members of the business and devise a contingency plan for the company. If the owner were to become incapacitated, this strategy would appoint an interim successor, address many essential estate planning services, and help alleviate any disruptions. The attorney will also discuss the transfer of ownership at this time.
After evaluating the business, the attorney can work with the owner to determine the best exit plan (or acquisition). Transfer options include retention (keeping it within the family), buy-sell retention (offering more shares to other stakeholders), merging with another business, or a divestiture (selling the subsidiary or business line to another company). If your business needs guidance in finding a successor, we can help. Similarly, if your company is facing any lien issues, a Tampa construction lien lawyer will discuss the contingency plan for liens at this time as well.
Tip 5: Include an Experienced Attorney to Oversee the Change
The most important part of any merger or acquisition is to hire an experienced attorney to oversee the process. An attorney who is experienced in mergers and acquisitions law in Tampa will walk you through every step of the process and help keep your existing contracts and projects on track. For a legal ally who can guide you through a merger or acquisition, contact a mergers and acquisitions attorney in Tampa from Cotney Construction Law.
If you would like to speak with a mergers and acquisitions attorney in Tampa, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.