Every M&A Transaction Is a “Big Deal”
It’s been a busy year. Over the past 12 months, the attorneys of Offit Kurman’s Mergers & Acquisitions (M&A) practice group have helped our clients close a record-breaking number of business transactions here in the Mid-Atlantic.
With stories of success, however, certain assumptions tend to follow. Business owners looking to buy or sell sometimes mistakenly believe Offit Kurman is too busy or expensive for their needs. A common objection typically sounds like: “My deal is probably too small for you.”
Lately, I’ve been hearing from sellers with businesses worth $5 million or less. In any other context, it would be a bizarre thing to say. One million dollars is not “small.” For the majority of us, a check of that size would be a life-changing amount of money. But the marketplace has a way of skewing perceptions. M&A advisors and investment bankers typically chase transactions in the eight and nine-figure range, and many refuse to go after anything worth less than $10 million. The same holds true for many law firms. As a result, owners of closely-held businesses become jaded and self-select out of the market.
Other business owners, meanwhile, believe the opposite: that our firm is exclusively focused on small or mid-market transactions, and we do not have the capability to handle large, multimillion-dollar deals.
As someone who has seen hundreds of transactions through to completion, allow me to provide some perspective: every M&A transaction is a big deal. Especially if you’re a seller, we’re talking about what may be the single largest transaction in your lifetime.
Moreover, at Offit Kurman, we are deal price agnostic. That means we are happy to provide representation and guidance to any business owner regardless of the potential size of a transaction.
Here are a few more reasons why deal size should not limit your ability to work with a qualified M&A attorney:
- The size of the deal has no bearing on your legal fees. At Offit Kurman, we do deals at $1 million, $10 million, $100 million, and above (and below) because purchase price has no financial impact on our billing structure. Our job is to zealously represent and protect every client. In contrast to investment bankers, who usually get paid a percentage of the deal, our attorneys bill a flat, hourly rate. That means time — not size — is what counts. Factors such as the condition of your business and the complexity of the deal determine how much work your attorneys have to do.
- M&A demand is market-driven. Buyers and sellers control the M&A market. You could have a massive, multinational business — with advisors lining up to help you sell it — but if there’s no demand for the company, there’s no deal. Similarly, a small, well-positioned firm could be a hot commodity in its niche. A five-person government security contractor, for instance, might be able to leverage its relationships and intellectual property to create competition among multiple potential buyers.
- You don’t need to pay big money for expertise. Be wary of working with advisors who only take on enterprise M&A — there’s a good chance they’re overcharging and under-experienced. At Offit Kurman, we have successfully negotiated complex deals of various sizes, industries, and geographies. We bring this experience to every client matter. We can scale our representation to the size and character of the business, as well as the personality of the owner, at a price point and workflow that meets the client’s needs.
Ultimately, M&A transaction size is relative to one’s frame of mind. As a seller, you may not be able to change the value of your business, but you can control the value of the experience in shaping your future. Instead of worrying about how your purchase price compares to that of another business, focus on your own goals.
Retiring wealthy? Now that’s a big deal.
For more M&A guidance and news about recent transactions closed for our clients, be sure to follow the Offit Kurman blog. To learn more about Offit Kurman’s legal services, click here. To get in touch with me, click here.
ABOUT MIKE MERCURIO
Mike Mercurio | firstname.lastname@example.org | 301-575-0332 | Biz Tek Today
Mr. Mercurio is a Principal and the Chair of the Firm’s Business Law and Transactions Practice Group. He serves as outside general counsel to clients on matters related to corporate and business law, commercial transactions, government contracting, healthcare, construction services, and real estate. As a strategic partner to firm clients, Mr. Mercurio regularly counsels entrepreneurial individuals and assorted entities on all aspects of business and commerce including formation and structure; ownership, management, and control; financing and capital; expansion and acquisition; sale and transfer; and contraction and dissolution.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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