Practice Areas

Mergers & Acquisitions

Whether you are buying a business, selling one or combining with a partner, the terms you agree to at the outset shape everything that follows.

GKG Law’s Mergers & Acquisitions practice represents buyers, sellers, owners and management teams in acquisitions, sales, mergers, joint ventures, minority investments and restructurings of privately held companies. Our attorneys structure transactions, conduct and coordinate due diligence, and draft and negotiate confidentiality agreements, letters of intent, stock, membership interest and asset purchase agreements, merger agreements and the employment, financing and transition documents that accompany them.

We address the tax, employment, intellectual property, regulatory and corporate governance questions a transaction raises as part of the deal itself, so that our clients work with one coordinated team from the first term sheet through closing and the post-closing period.

Buy-Side and Sell-Side Representation

We represent clients on both sides of the table.

For buyers, we help identify and price risk before signing, negotiate representations, warranties and indemnities that reflect what due diligence has found, and plan for the integration of the acquired business, its contracts and its people. We also advise buyers that acquire regularly, including platform companies making add-on acquisitions, on a repeatable process and a consistent set of deal documents.

For sellers and their owners, we prepare the company for a sale process, organize the information buyers will request, and negotiate the purchase price adjustments, escrows, holdbacks, earnouts and post-closing obligations that determine the proceeds the owners keep.

We also represent management teams and minority owners whose interests in a transaction differ from those of the company or its majority owners, including in rollover equity, the treatment of options and other equity awards, transaction bonuses and change-in-control payments, and employment and retention arrangements.

Deal Structure and Tax Planning

The structure of a transaction drives its tax consequences, the liabilities that pass to the buyer, and whether contracts, licenses and permits must be assigned or re-issued. We advise on asset purchases, stock and membership interest purchases, mergers and hybrid structures.

We address tax from the start of the transaction. For S corporations, partnerships and limited liability companies, which make up most privately held targets, that includes whether a stock or interest sale can be treated as an asset sale for tax purposes through a Section 338(h)(10) or 336(e) election or a pre-sale reorganization, how to structure rollover equity so that the owners’ continuing interest is not taxed at closing, and the allocation of the purchase price among the assets acquired. We also consider the tax treatment of deferred and contingent consideration such as seller notes, escrows and earnouts, and the state and local taxes that can apply to the transfer itself.

Due Diligence

Due diligence tells a buyer what it is buying and tells a seller what a buyer will find. We scope the review to the size of the transaction and the risks that matter for the particular business, rather than running the same checklist on every deal.

For buyers, we conduct the legal review and coordinate the work of accountants and other specialists. The review ordinarily covers:

• Corporate organization, good standing, capitalization and ownership of the equity being acquired
• Material contracts, including anti-assignment and change-of-control provisions that require a counterparty’s consent
• Licenses, permits, registrations and regulatory compliance, and whether they transfer or must be re-issued
• Employment, independent contractor, benefit plan and equity compensation arrangements, and the obligations a sale triggers under them
• Intellectual property, software, data privacy and cybersecurity
• Real estate, leases, environmental matters and the condition of title to significant assets
• Litigation, government investigations, insurance coverage and government contracts
• Tax filings, open years, elections and exposure in states where the business operates

The findings feed directly into the purchase agreement: the representations and warranties a buyer asks for, the special indemnities it requires for known matters, and the consents and clean-up items that become conditions to closing.

For sellers, we assemble and review the same materials before a buyer does, so that problems are corrected or disclosed on the seller’s terms rather than discovered by the buyer and used to reduce the price.

Purchase Agreements and Transaction Documents

The definitive agreement allocates risk between the parties and defines their rights after closing. GKG Law’s attorneys draft and negotiate:

• Confidentiality agreements, letters of intent and term sheets, and exclusivity and no-shop arrangements
• Asset purchase agreements, stock and membership interest purchase agreements, and merger agreements
• Disclosure schedules, representations and warranties, and indemnification provisions, including baskets, caps, survival periods and special indemnities for known matters
• Purchase price mechanics: estimated and final closing statements, working capital adjustments and independent-accountant dispute procedures, escrows, holdbacks and earnouts
• Interim operating covenants, conditions to closing and termination rights
• Employment, consulting, retention and restrictive covenant agreements
• Rollover, contribution and equityholder agreements for owners who retain an interest in the business
• Transition services, license, supply and distribution agreements
• Promissory notes, security agreements, loan facilities and other seller and third-party financing documents
• Bills of sale, assignment and assumption agreements, and intellectual property assignments

When a buyer obtains representations and warranties insurance, we work with the broker and the underwriter on the policy and on the purchase agreement provisions that interact with it.

Corporate Records and Transaction Readiness

A buyer’s first request is almost always for the company’s organizational documents, and the condition of those documents sets the tone for everything that follows. Gaps in the record become exceptions to the seller’s representations, items for special indemnities and reasons to hold back price.

We help privately held companies keep their corporate records current and compliant with the laws of the states in which they are organized and operate, whether or not a transaction is on the horizon. That work includes:

• Articles or certificates of incorporation or formation, bylaws and operating agreements, and the amendments needed to reflect how the business is actually owned and run
• Shareholder, member and buy-sell agreements and their transfer restrictions, rights of first refusal and drag-along and tag-along provisions
• Board, shareholder and member resolutions and written consents, including ratification of past actions that were taken without a formal approval
• Stock ledgers, membership interest schedules and capitalization tables that reconcile to the equity actually issued
• Foreign qualifications, annual reports, registered agents, business licenses and state and local tax registrations
• Contracts, leases, licenses, domain names and intellectual property that are held in an owner’s or affiliate’s name rather than the company’s

For a company preparing for a sale, we review these materials well before the process begins and correct what we find, so that the company goes to market with a clean record and the authorizing resolutions and certificates a closing requires are ready when they are needed.

Industry Experience

GKG Law’s attorneys have worked on stock, membership interest and asset purchases, for buyers and for sellers, in a wide range of industries, including:

• Aviation services, including Part 135 charter operators and aircraft management companies
• Freight forwarding, customs brokerage, ocean transportation intermediary and logistics businesses
• Healthcare services, including ambulatory surgery centers and optical retail
• Engineering, information technology and professional services firms that contract with the U.S. government
• Human resources outsourcing, professional employer organizations and payroll services
• Recorded music, music publishing and distribution, and publishing and media
• Telecommunications, internet and satellite communications
• Software and technology
• Association management
• Retail, grocery, restaurant and hospitality businesses
• Audio-visual, live event and trade show services
• Shipbuilding, naval architecture and marine engineering

Family-Owned and Closely Held Businesses

For the owners of a family-owned or closely held business, a sale or transfer is often a once-in-a-career event. GKG Law assists with the strategic planning needed to accomplish management succession in an orderly fashion, and with sales to third parties, to management or employees, and to the next generation.

We advise on buy-sell, shareholder and operating agreements, redemptions and recapitalizations, management buy-outs, seller financing, and the employment and consulting arrangements that let a departing owner stay involved during the transition.

If you are considering a purchase, sale, merger or other transaction, or would like to schedule a consultation, please contact Richard B. Bar at rbar@gkglaw.com or (202) 342-6787, or Klugy Mathurin at kmathurin@gkglaw.com or (202) 342-5229.