Legal Blog

M&A Nuggets: The Little Things Can Add Up

Most of the time and effort on an M & A transaction is rightfully devoted to the big ticket items – the enterprise value, the due diligence process, negotiations over indemnifications and post-merger integration.  As a result, less significant items, or the “little things”, may be swept under the rug and not paid attention to.  These little things can add up. A proper and complete handling of the transaction should address them.  Here are a few of the little things to pay attention to:

  • How are security deposits, including deposits under real estate leases, handled? Are the deposits included in the purchase price and acquired by the acquirer without reimbursement, or are they an excluded asset?
  • Some states impose a bulk transfer tax on the value of the assets acquired in a transaction. The sharing of that tax between the acquirer and seller should be a point of negotiation;
  • Paid time off that has accrued to seller’s employees can actually be more than a little ticket item. Depending upon the time of the year when the transaction occurs and the amount of time off that has accrued, it may be appropriate to negotiate with the acquirer to be responsible for a portion of the paid time off; and
  • It is common for acquirers to require sellers to obtain tail insurance that covers claims related to actions before the closing, that are made after the closing. The number of years that tail insurance is required to be maintained will affect the cost of the insurance and should be negotiated.

As every seller who has sold a business knows, the transaction costs in M & A deals can be expensive.  Paying attention to the little things can help to offset those costs. To end this nugget with a bit of humor, Larry David was quoted as saying “I don’t take on big things. What I do, pretty much, is make the big things small and the small things big”.


If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at or 443-738-1522.



Picture of Glenn Solomon wear a black suit, white shirt, and a red | 443-738-1522

Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.