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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, July 12, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

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

Faculty

Kenneth W. Clingen
Partner
Clingen Callow & McLean, LLC

Mr. Clingen chairs the firm’s business counseling department. He is general counsel to a number of privately owned businesses across a variety of industries and also represents high net worth individuals and family offices. He counsels clients in starting new business ventures, operating their ongoing business enterprises and preparing business succession plans for business owners.

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Terri Krivosha
Partner
Maslon LLP

Ms. Krivosha, business attorney and mediator, enjoys nothing more than helping shareholders, family business owners, and companies buy or sell businesses or solve their legal problems—the more complicated, the better. She loves helping clients and parties to a mediation resolve conflict. After years of experience with a wide array of commercial transactions and businesses, Ms. Krivosha is now focusing her practice on M&A, restructurings and shareholder business divorces, and mediation of commercial disputes.

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Michael A. Ellis
Partner
Buckingham Doolittle & Burroughs, LLC

Mr. Ellis focuses his practice on mergers and acquisitions; corporate governance; public and private securities offerings; executive compensation and shareholder communication matters, and defensive tactics in tender offers

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Description

Family-owned businesses, accounting for over 60 percent of jobs in the U.S., are a crucial target for both strategic and financial buyers. However, mergers and acquisitions of family-owned businesses are complicated for a variety of reasons, including valuation challenges, tax and estate planning considerations, internal governance, and potential issues concerning a generational transfer of the business. An acquisition can be a new and challenging undertaking for existing owners, and management may have an emotional attachment to the company.

Counsel representing buyers of family-owned businesses should carefully conduct due diligence to identify potential risks and liabilities and seek to mitigate those risks and liabilities or "price them into the deal." Counsel should also give management deal-side support so that it can continue to run the business and meet any projections during the sales process provided to potential buyers.

When structuring the sale of a family-owned business, counsel must evaluate whether a stock purchase or asset purchase is the most prudent option, considering tax and other financial impacts. Counsel can also advise how to structure any retained ownership (often required by financial buyers) in the business following the sale. Counsel must also develop a strategy for using earnouts, "seller paper," "rollover equity," or other methods to bridge valuation gaps or to provide needed cash to fund the purchase price.

Listen as our authoritative panel discusses best practices for managing valuation, due diligence, deal structure, tax, estate planning, and other challenges in acquisitions of family-owned businesses.

Outline

  1. Key legal, business, and tax considerations with the acquisition of a family-owned business
  2. Due diligence best practices
  3. Structuring the deal
  4. Valuation challenges and solutions

Benefits

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 "reinvest" 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?