Family-owned businesses, accounting for over 60% of jobs in the U.S., are a key target for both strategic and financial buyers. However, mergers and acquisitions of family-owned businesses are complex for a variety of reasons, including valuation challenges, tax and estate planning considerations, internal governance and decision-making issues, potential issues with respect to generational transfer of the business, the potential for a major transaction to distract management time and attention from running the business, and the owners’ emotional attachment to the business.

Counsel representing buyers of family-owned businesses should conduct due diligence to identify potential risks and liabilities, determine how to minimize those risks and liabilities, and/or make recommendations for “pricing into the deal” risks and liabilities or whether to proceed with a transaction.

Counsel for the family-owned business should prepare the business for the sale by identifying potential red flags that could derail the sale or create a purchase-price reduction, while giving management deal-side support to run the business and meet any projections provided to potential buyers during the sales process.

When structuring the sale of a family-owned business, counsel must evaluate whether a stock purchase or asset purchase is the most prudent option, taking into account tax and other financial impacts, as well how to structure any retained ownership in the business following the sale that is often required by financial buyers.

Counsel must also develop a strategy for using earnouts, “seller paper,” “rollover equity” or other effective methods to bridge valuation gaps or to provide needed cash to fund the purchase price.

Our panel will examine key legal considerations for counsel involved in structuring acquisitions of family-owned businesses. The panel will discuss strategies for addressing valuation; conducting due diligence; evaluating whether to structure the deal as a stock purchase, asset purchase or purchase of LLC units; transitioning business operations to the new owner; and other important issues.

The panel will review these and other key issues:

  • What legal and business issues arise with the acquisition of family-owned businesses?
  • What are the key components of a comprehensive due diligence plan for both buyers and sellers?
  • What are the benefits, risks and tax aspects of structuring the sale as a stock sale versus asset sale versus merger?
  • What valuation challenges do acquisitions of family-owned businesses present and how can they be overcome?
  • When and how should family members decide to “re-invest” in the family business with “rollover equity” when selling to a financial buyer and what are the tax impacts of doing so?
  • How to prepare in advance of a transaction to address the family’s estate planning needs
  • What management and transition-related issues could arise when selling a family business?

 
After the presentations, webinar participants will engage in a live question and answer session so we can answer your questions about these important issues directly. For more information visit: https://www.straffordpub.com/webinars

Or call 1-800-926-7926 ext. 10
Ask for Acquisitions of Family-Owned Businesses on 11/29/2017
Mention code: ZDFCT