Your M&A advisor has successfully negotiated the final details of your merger and acquisition term sheet including how the deal will be allocated for tax purposes. Closing is set to take place in four weeks, no problem you say, its just a matter of transferring the agreed upon terms to the legal docs, right? Wrong, poorly managed this phase can become rife with delays. M&A deals are cyclical in nature and one or both attorneys may be buried with other deals with everybody fighting to get their folder to the top of the pile. In addition, left to their own devices lawyers will clearly show the value they bring to the table and the next thing you know there are a few dozen more issues to negotiate. The delays pile on as the lawyers work to remove all the pretty colors from the “track changes” that riddle the closing documents. Its inevitable the blame game starts, its the seller’s or buyer’s attorney’s fault, or perhaps the clients themselves are not responding to inquiries from their attorney. Perhaps the m&a advisor took his/her eye off the ball and caused delays.
The reality is the majority of delays result from lawyers doing their jobs in m&a transactions and making sure that the client is getting the proper advice. However, personalities get in the way and clashes of unmanaged one up-man-ship lead to arguments over whether a comma is necessary.
Recognize that it is easy to sit behind a desk, phone and computer and both be miles apart literally and figuratively on the legal docs. At iMerge, our m&a advisors, while often times facing resistance, insist on either virtual real time usage of secure data rooms with all parties communicating in marathon sessions to see and implement the finalization of the legal docs or the alternative being face to face locked in a conference room. Face to face meetings on neutral turf in which the parties cannot “hide” tend to be more effective although they come with additional expenses and delays trying to get everybody’s calendar in sync to travel, the “lets get er done” mentality is more robust. Its amazing what terrible coffee in a dull conference room on the coldest day of the year in Minneapolis can accomplish.
So make sure the attorneys do not have free reign of the place, better yet work with a highly experienced , like Seattle Washington based m&a advisor firm, iMerge Advisors, that will strive to make the process proceed smoothly.