Mergers and acquisitions of companies are complex processes and in order to achieve desired results several important factors must be taken into account. During the process, verification, investigation and audit of the target is carried out (due diligence), negotiations are held and the principles and rules of both the transaction and future operations are determined. We definitely recommend involving our experienced and qualified lawyers at least in the following legal areas: commercial, tax, contract, and employment law.
Remo’s law firm lawyers advise clients throughout the entire process, starting with participation in negotiations, conducting an audit, drafting various agreements, and ending with the formalization and conclusion of the transaction. If you feel you don’t want to use a qualified advisor during the whole process, we definitely recommend involving experts in due diligence process and in drafting contracts.
The scope of the due diligence is agreed upon in cooperation between our lawyers and the client. It is possible to do either a comprehensive analysis of the entire company, or to focus only on strategic issues and areas. As part of the due diligence, we also involve auditors or qualified accountants if necessary. Our goal in due diligence is to protect the client’s interests, identify legal or tax risks, and propose solutions to mitigate risks. The results of the due diligence are an important basis for the preparation of the merger and acquisition agreement.
Sometimes, during the due diligence, circumstances are revealed that are not considered a risk, but are important for the client in planning future activities. As an example, performing a due diligence of the company, our lawyers found that the employment contracts did not meet the conditions stipulated by law. The fact did not affect neither the price of the acquired company nor other terms of the acquisition, but knowing about the problem, the client asked us to draft new employment contracts. Three months after new agreements were signed the company was visited by the Labor Inspectorate checking also the employment contracts and found no problems.
Also, during the due diligence, we have identified such problems, which have significantly affected the price of the company to be acquired and the terms of the transaction. Detecting major problems during the due diligence process provides arguments for negotiations or allows client to withdraw in time.
The prices of the due diligence vary and depend on the agreed scope of work. Our lawyers help to determine the scope of the due diligence, which heavily depends on the economic activity and specifics of the company to be acquired.