Brooklyn Mergers And Acquisitions Lawyer

Brooklyn has an incredibly dynamic business environment, with a growing tech sector that has become a major force in New York’s economy. The entrepreneurial spirit of Brooklyn has been even more evident since the pandemic, with new businesses in every industry, from grocery stores and child care centers to computer systems design and technical consulting. Today, more than 3700 Brooklyn-based businesses have over $1M in revenue, and there are even more opportunities for growth and investment in the area. 

While we instinctively think of these companies as doing business with consumers, many of the largest transactions are made when companies do business with each other, typically through mergers and acquisitions. As companies consolidate, restructure, or transfer ownership, they undergo significant changes.

There have been scores of acquisitions of Brooklyn startups in recent years, and many startup founders aspire to eventually sell their company or technologies to another firm. These types of transactions are so complex that they have evolved their own legal specialization, with mergers and acquisitions lawyers who are experts in these deals. A Brooklyn merger and acquisition lawyer is essential when companies combine with each other.

What Are Mergers and Acquisitions?

Mergers and acquisitions (also known as M&A) are transactions through which companies trade ownership or major business assets with each other. A “merger” is a very different transaction from an “acquisition,” but many of the considerations are the same, and the term “mergers and acquisitions” has come to encompass a wide range of transactions. It is also often used for the professional services that accompany these transactions, like mergers and acquisitions attorneys, financial institutions, advisory and consultant firms, etc.

In the U.S., mergers and acquisitions must comply with antitrust laws. Mergers and acquisitions that threaten to lessen market competition or create a monopoly must comply with Federal Trade Commission and U.S. Department of Justice regulations. In some cases, the government may block or restrict these deals, and the process of getting approval can be complex and time-consuming.   

Common Types of Mergers and Acquisitions

In the high-speed world of New York, businesses, companies, and assets change hands every day. As a general rule, a “merger” is a transaction where two different business entities merge and become one, while an “acquisition” is a transaction where one company purchases another. However, within these broad categories, there are many different types of transactions.

Types of Mergers

The two basic types of merger are a purchase merger, where one company buys another, and a consolidation merger, where a new company is formed that contains both target companies. Within those two categories, there are several different types, including:

• Horizontal Merger. A merger between two companies who are direct competitors in the same product line and the same market.
• Vertical Merger. A merger between two companies that are in a buyer/supplier relationship. For example, if a coffee roasting company purchases a coffee-growing company, it would be considered a vertical merger.
• Congeneric Merger. In a congeneric merger, both companies serve the same market in different ways. For example, if a television station were to purchase a newspaper, it would be a congeneric merger.
• Conglomerate Merger. When the two companies have no common products or relatedness, it is called a conglomerate merger. For example, if an ice cream company purchased a dish soap company, it would form a conglomerate.
• Market-extension and Product-extension Mergers. If a company buys another company that sells the same product in a different market, it is a market-extension merger. If a company buys another company that sells a related product in its own market, it is a product-extension merger.
• Triangular Merger. The most common form of merger is a triangular merger, where the buying company creates a shell subsidiary corporation that purchases the target company. In a “forward triangular merger,” the purchased company merges into the subsidiary, and the subsidiary company survives the transaction. In a “reverse triangular merger,” the subsidiary merges into the purchased company, and the purchased company survives the transaction.

Simple Acquisitions

In a simple acquisition, one company purchases a majority stake in another company without changing its name or structure.

Tender Offers

In a tender offer, a company offers to purchase the outstanding stock of another at a set price rather than the market price. The offer is made directly to shareholders rather than management or the board of directors, and the shareholders may agree to the acquisition at that price.

Acquisitions of Assets

In an acquisition of assets, one company purchases the assets of another. This is a common part of restructuring or bankruptcy proceedings, where a company sells its assets prior to liquidating.

Management Acquisitions or Management Buyouts

In a management acquisition, a company’s executive and leadership team purchases the assets and operations of the company they manage. This is typically done in order to take a public company private and give management more control over the business.

When the target company does not wish to be purchased or does not agree to the deal, the transaction is always considered an acquisition and is typically called a “hostile takeover,” regardless of the specific type of transaction. Likewise, a friendly acquisition is often called a “merger,” regardless of the type of transaction. 

What Does a Merger and Acquisition Attorney Do?

Mergers and acquisitions are extremely complex deals, and they have given rise to an entire specialist area of corporate law. The businesses on each side of these transactions retain their own M&A lawyer because the target company and the purchasing company have different requirements and objectives and need to have their interests protected.

That means the duties of a merger and acquisition lawyer are slightly different, depending on whether they are working for the purchasing company or the target company. Generally speaking, a Brooklyn mergers and acquisitions lawyer can be expected to:

• Prepare a company for sale by reviewing its structure, legal relationships, and areas of liability, formalizing relationships, and reducing risk for the buyer
• Conducting due diligence for the purchasing company, including reviewing the target company’s structure and organization, contracts, assets, etc., in order to understand the value, risks, and scope of the transaction
• Identifying conflicts of interest, third-party consent requirements, and other factors
• Advising on disclosure and legal obligations related to the transaction, including compliance with federal securities laws, listing standards, and fiduciary duties
• Advising management and shareholders of their rights and responsibilities during the transition, including dissenter’s rights
• Drafting necessary documents, including letters of intent and other documents
• Negotiating and creating contracts and agreements, including disclosure schedules, exclusivity or confidentiality agreements, escrow agreements, transaction agreements, etc.
• Coordinating and working with other specialist attorneys, including tax attorneys, antitrust attorneys, etc.
• Providing tactical advice
• Advising on defensive measures to avoid a hostile takeover, if necessary

Every type of merger or acquisition transaction has different tax and operational impacts on both companies or the third entity that arises from the transaction. Businesses engaged in M&A activities need to work closely with attorneys in order to determine the most favorable way to finance and structure the transition.  

Need Guidance? Contact the Fridman Law Firm Today

Mergers and acquisitions are big deals that shape the history of a corporation, with impacts that can affect countless people. It is essential to have experienced legal representation throughout the process and work with an attorney you can trust.

The Fridman Law Firm is invested in your success, with the expertise and experience that helps your business reach the next level, no matter how high your aspiration. Our entrepreneurial know-how, legal expertise, and customized solutions deliver exceptional value to businesses of all sizes. Contact us online or call us today at 212-262-9823 for a consultation.