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Writing
Easy
reading is damned hard writing.
Nathaniel Hawthorne
Clip from the December 2002
“Industry Watch” column for
www.interfacetechnews.com:
A
tech company looking to be acquired needs to:
-
Stay one step ahead of
underwriters by performing due diligence on itself as
well as its clients, collecting, managing and updating
information in advance of acquisition.
-
Thoroughly examine
company assets to understand the true balance sheet and
income statement.
-
Resolve outstanding
legal issues and blemishes like back taxes.
-
Tie together
representations and warranties regarding the accuracy of
financial records as stated in the purchase contract.
-
Assess and make current
the articles of incorporation, operating agreements,
annual reports, votes of officers authorizing action
items, list of shareholders and shares subject to
vesting.
-
Clear the stock ledger
and any related shareholders’ agreements.
-
Get key employee
agreements with independent or subcontractors in clear
and concise writing as to the impact of the relationship
on the business.
-
Safeguard the potent
bargaining tool of intellectual property with
appropriate trademark, copyright, or patent filings; and
nondisclosure, nonsolicitation, noncompetition and
assignment of invention agreements.
-
Know the legality of
transferring outside licensed intellectual property to
assets or company stock in a sale.
-
Have business-specific
(not boilerplate) license agreements in place.
-
Document key customer
and supplier relationships in writing.
-
Provide incentive
packages to maintain loyalty among key employees whose
departure could affect the value of the purchase price.
-
Talk to investment
counselors and bankers, business brokers, industry
godfathers, and people involved in tech industry
purchase and sales to get the word out to the right
audience.
Reader Comment:
4 December
2002
Dear Janis:
Great article in the latest issue of Interface Tech
News,
www.interfacenow.com
on
"Positioning for Mergers & Acquisitions." I don't know
your background, but I am always impressed when a reporter
masters a technical subject well enough to 'get it right.'
It appears to me that you did. I am an M&A
advisor/business broker in Portland, Maine, with 22 years
experience, so I guess I would know. Glen Cooper, CBA,
BVAL,
Certified
Business Appraiser, Business Valuator Accredited for
Litigation, President, Maine Business Brokers' Network.
Web site:
www.bizbuysell.com
Persuasive Pen
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