Category Archives: Mergers & Acquisitions

Mergers or acquisitions that create limited liability companies, new corporations, partnerships can be very complex transactions, and experienced business law attorneys in New Jersey can provide expert advice and consultation in the formation of any of these and other types of business entities.

How to Merge with Another Company

When deciding on the next way to grow your business, you may consider combining your business operations with another entity to increase market share or gain valuable assets. Two ways to do this is through mergers and acquisitions. Merger: When two companies combine into one. There are different types of mergers, most of which combine companies or assets in similar industries. Acquisition: When a company claims ownership of another company by purchasing at least 50 percent of its assets. This is done through purchases of stock or other types of property. Both options can be beneficial or disastrous, depending on the decision made. Many times, companies may not be as compatible with each other as they initially thought, resulting in huge losses for both companies. Deciding on which company to merge or acquire with and what new entity to form is very important. Different Kinds of Business Entities Corporation: A…
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5 Steps for Maintaining Your Company Culture After an Acquisition

A merger or acquisition by a large company is a common objective for business owners, but sometimes smaller companies lose their unique culture after the merger closes. These changes can scare away top employees and take away from the business’s unique strengths. Here are some ideas on how to preserve your company culture after a buyout. 5 Steps for Maintaining Your Company Culture After and Merger or Acquisition Create clear expectations: One key to a successful merger is retention, and one of the keys to retention is to eliminate uncertainty as soon as possible. Make sure the whole team knows what compensation, benefits and expectations there will be at the new company. Even if not all the news is good, it’s better to let them know than keep them in the dark. Good people usually have plenty of opportunities to leave if you don’t keep them in the loop. Appoint…
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Things to consider before buying a franchise

Purchasing a franchise may seem like a no-brainer, as you are buying into an existing business that has already seen some success. However, even a well-established brand is not a risk-free endeavor. Buying a franchise carries a fair amount of risk. There are a number of things you should consider before you start plotting your acquisition of a franchise. First of all, review your franchise agreement carefully. It holds the key to just about every facet of your franchise, including your obligations and terms. It is important to know what you are getting into so you can determine if the franchise is a good fit for you. Consider additional costs that you may face after your franchise fee. You may need to cover rent, furnishings and remodeling, inventory and insurance. You should also be prepared to pay the necessary number of employees before your franchise gets off the ground. Take…
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Common types of mergers: part two

Last week we introduced business mergers and explored three common types of mergers available to businesses looking to expand their scope. Conglomerate, market extension and product extension mergers all involve joining two or more businesses to benefit both. The success of mergers is based on the idea of synergy: that the performance of two companies combined will be greater than their total performance if conducted separately. Horizontal and vertical mergers traditionally involve businesses in the same market that manufacture or distribute related – or even identical – goods and services. Both increase the merged business’ market share, potentially yielding greater profits. A horizontal merger occurs between two companies in the same industry, sometimes direct competitors. Two companies providing the same product in the same market may merge to create a new, larger organization with more market share. The combination of two competing restaurants in the same market could be classified…
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Common types of mergers: part one

Loosely defined, a merger is a combination of businesses. A merger can occur when one business acquires another or when two combine as equals to form a new entity. There are five common types of mergers that business owners and representatives should be familiar with. How mergers are classified depends on many factors, including the function of the merger, the relationship between the entities being merged and the purpose of the transaction. A conglomerate merger occurs when two businesses merge whose business activities have nothing to do with each other. Conglomerate mergers may be pure or mixed. A pure merger means that the business activities are completely separate and the merger does not affect each business’ competition. On the other hand, a mixed conglomerate merger occurs when unrelated businesses merge to expand their competitive reach. For example, a movie production company may merge with a television network to increase the…
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