Companies in California may want to expand by purchasing another firm through an acquisition. There are a number of ways that companies can merge with or buy another firm and different structures that the resulting business can take. The way in which an acquisition proceeds depends on how the other company is owned. When the other business is privately held, the owners of the business can decide the selling price and other criteria involved in the purchase. In many cases, buying a privately owned business is a faster, more flexible process than buying one that is publicly traded on the stock market.
The acquisition process can involve intricate negotiations that affect the transition process, provide assurances about employees and manage the transfer of intellectual property. In many cases, the copyrights, trademarks and patents owned by a company are its most valuable assets. Research and due diligence is an important part of any corporate merger and acquisition. These are the only way to understand the true value of the deal and whether buying the business is a valuable prospect. This can involve reviewing tax returns, inventory levels, financial records and other key documents to get a better understanding of the company’s valuation.
Buying a publicly held company can be a more complex process. The purchasing company may offer a certain price for available shares and stock options, requiring acceptance by the shareholders. These mergers often involve sizable corporations with significant assets and large numbers of employees.
Business owners looking to enhance their profits may look to buying another business as a way to expand their reach. The merger and acquisition process requires detailed understanding of the companies involved and desired outcomes. A business law attorney may provide advice and representation throughout the process, from conducting due diligence to negotiating an advantageous agreement.