I love the way you speak about your job and this profession. It seems you take pride in this and are genuinely interested. Yeah this job is tough but I'm glad there are lawyers like you. And thanks for sharing!
It’s pretty clear why you’re at such a high level your personality and crystal clear way of speaking is something of great value for any business or corporation
Killed it! I saw the complete video and read all the comments and your detailed response to most of them. I must say it would be a priviledge for your clients and the people who work with you with such a clear guidance. The detailed responses were very informative and worthy. I personally learnt a lot. Kudos from India!
Impressive. Pretty a rookie on this! I just didn't know about M&A but your explanation is a mark of a guru. Well done Sir, that to me is a truly definition of the state of the art! Looking forward for brighter business days ahead
Hi Brett, I am a law school student with my 1st “big law” internship coming this summer. I am interested in transactional/M&A type of practice and wanted to know what I can do to prepare. Any book recommendations or any other tips would be super helpful! Thank you
You seem so kind and genuine. Also I love how you explain things! Thank you so much for this! I worked in the legal sector for a long time but I am only now thinking about becoming an M&A lawyer! thank you :)
Considering going back to school for either accounting/finance BA or Law School for Transactions/Real Estate/and Tax Law. I wanted to ask if you have any recommendations for law school, the profession and learning how to prepare these documents or resources to learn this material? Is there any information you can provide with a day in the life as well? Thanks
Thank you very much, Mr Cenkus. Very informative presentation. I have a question - do investment banks help their clients identify and find potential acquisition targets? I give you an example of what I mean - let's say I have a commercial bank and I want to expand its operations by acquiring other banks. Can I instruct my investment banker to find all the commercial banks which fit the criteria laid out by me (e.g., size of the assets, geographical location, number of branches,etc), then approach their owners and start negotiating the acquisition?
@2:38 is interesting. Wondering why people say consultants charge more for a merger, when it seems we can do it ourselves. What exactly are they charging so much for?
Hi. Is it normal to ask employees, directors etc. To sign an undertaking whereby they are prohibited from buying buying shares of a listed company for a certain time period until the deal goes public? At what point do I ask for such undertaking? At the due diligence stage or at the initial offer stage?
Troy, I haven't gone to b-school (although my undergrad work was in Economics, so that's in the ballpark). When I was applying to grad schools in 1995, there was a zero chance any quality business school would take me from Messiah College and with one year of experience in the business world (probably not very likely today either!) So, I went to law school, never really intending to be, or identifying as, a lawyer. I've always loved business. I love finance, strategy, entrepreneurship. I've read tons and tons of books, self-studied, analyzed businesses - those are the sorts of things/topics where I lose track of time easily. Over the years, I've come to enjoy and identify with my lawyer role more, although I still gravitate toward the business side of things -- why deals get done, the financials, the people issues, etc.
Corporate paralegal here, thanks for the video! I’ve found: always look for liabilities in restricted stock units to employees or consultants the seller has retained.
Thank you so much Brett! I have an upcoming interview for an internship in Transaction Advisory Services - M&A with one of the BIG 4 this week and I wanted to ask to what extent their work is different from what you do. What advice can you give me for the interview itself regarding more theoretical questions? Thx again!
Philipp, I'm a bit behind circling back to your question and, because of that, I may have missed the opportunity to help you before your internship interview. Still, your question is a good one with broad relevance so I will answer it now anyway. Transaction advisory services at the Big 4 is similar to investment banking. Your job would be primarily a marketing and sales position with a heavy finance component. You would be more heavily involved in preparing a business for sale, marketing it, and negotiating the terms of a deal. You would also often play a key role in shepherding a deal toward closing -- a project management-type role. M&A lawyers get more heavily involved once the deal is struck (often once a letter of intent is signed) and their job is more about documenting and closing the deal than the strategic negotiation and structuring of the deal. It is sometimes different for me given my background on the M&A deal and finance side (non-law) side of thing, although clients don't typically look to their lawyer for guidance on the value of their business. They look to their lawyer for advice about the legal and tax ramifications of structuring an M&A deal one way vs. another (asset sale vs. stock sale vs. merger). That's probably the best way to put it -- transaction advisory services and investment banking is about pricing and marketing M&A deals and M&A law is about documenting and closing the deals. There is overlap, although there is still a distinct diving line somewhere in there.
Thank you Brett Cenkus, for the magnitude of value you share with us. I have a question, if you could shed some light: How could a potential buyer incentivize a broker to “recommend” 100% seller finance to the seller? Thanks in advance.
It is typical and generally safe. If you are the potential seller, be sure that confidential information does not need to be stamped CONFIDENTIAL, and be certain there is not a waiver of consequential damages. Those waivers are common in commercial agreements but not appropriate with NDAs since the type of damages you would incur if a party disclosed your confidential information in violation of an NDA would likely be classified as consequential.
Heyy Brett I wanted to ask when buying a business, how is the initial contact made is it by writing out letters and sending it out to the business owners or by sending e-mails to them? Thanks👍
Typically, a prospective buyer would reach out to a target company that isn't "on the market" by calling them. If they send an email, it is usually to schedule a phone call as a phone call is the preferred forum to discuss whether or not a target company has any interest in exploring a possible sale. FYI, that type of email is intentionally vague in case an employee who would not otherwise be told about a pending M&A reads it. The email might request a call to discuss a "possible strategic transaction." Depending on the sender's objective credibility/status, the sender may need to keep calling or be more candid in the email wording since the recipient may be less inclined to schedule a phone call with a sender they know nothing about
I’m currently a third year law student in New Zealand. Do you think it’s appropriate to describe mergers, acquisitions and takeover as company law? Do you think it leans towards more of contract law?
Taylor, I am not certain in New Zealand, although I would think it leans more towards contract law. I would expect company law to deal more with corporate governance and regulation.
is there an effective way to research mergers, as in articles of combination between one company taking over another. So if you think in terms of banking and financing. Banks buying other banks?
Given your experience in the field, do you have any suggestions for students earning a business degree on the specific route they can take that would be most helpful in getting into this field? Also, what are some of the things you enjoy about what you do?
I watched your video (leaning) towards the 10 steps for the selling company. You mentioned the info might be used by the buyer also. A private buyer with intent to acquire a five million dollar company, how do the steps differ if at all? I live in the Caribbean region. Most laws here are similar to the US if not more lenient. How do I begin the process (contact said company) without negative response?
You are working with a client as a Chief Technology Officer, and you have produced a graph to help your client understand how each of the investment accounts will behave over time. Write your client a report outlining an investment forecast and recommending in which type of account they should invest. In your report, to support your claims you should use comparisons of the data and an explanation of the chart trendlines on the next tab. Address whether the client is looking to invest short term (five years or less) or long term (longer than five years). Which of the chart types on the following Excel page, titled “Chart Types” will be most useful for supporting your recommendations? Why? can you answer that question please?
Hello, I’m currently doing research for a paper I’m writing for my college admission. I’m writing a research paper on Tenant landlord evictions that focuses on landlords/owner of the property in an active M&A with open eviction cases during this process. 1. Why would a stock price Change from $25 to $0.01 During an M&A 2. When does the Ownership Change? 3. Does the Ownership change During the M&A or is it the transfer/purchase of Stocks, assets or both? 3. Where can I find citations , statutes, codes that refer to my first 2 questions? Any references, cases that you can refer me to would be greatly appreciated.
Hey Brett. I really appreciate your videos. Just wondering if jurisdiction constrains your reach, by that I mean, could you structure a deal say in Toronto or some foreign country? Thanks
Jurisdiction does not constrain our reach, although it reduces available opportunities (deals that we might work on) for a few reasons, including because (a) a lot of business owners still shop for professional services locally, and (b) if a deal has a very strong real estate or regulatory component--both of which are decidedly local subjects--we may not be a great fit.
@@BrettCenkus I agree with the locality argument but that's becoming obsolete hence our current dialogue via RUclips. I was debating whether to complete a JD/MBA to complement my entrepreneurial plans but I'll leave the legality to the experts. I'll contact you when as soon as required. Thanks Brett.
@@BrettCenkus Oh, and thanks for the reply. I am pleasantly surprised. Also, regarding the industries, I am looking at being in this business for the long haul, 15-20 yrs, at least. So, this being a rapidly changing world, this plan factors into the industry I will choose. I was planning to do healthcare, but I am not thrilled with this industry as a long term play for me. Manufacturing seems like viable option. Again, any feedback world be appreciated.
What is the difference between commercial and corporate lawyers? Or is commercial lawyer simply an umbrella term for all lawyers that deal with issues that relate to businesses?
Jenny, great question! I generally see the word "commercial" used to qualify a specific type of lawyer, e.g., commercial litigator or commercial real estate attorney. Used in that way, it means the attorney deals with businesses, not consumers. I would not go so far as to say that word is an umbrella term for all lawyers that work with businesses. Case in point -- I do not use that term or think of myself as a commercial lawyer, even though the work I do is entirely for businesses. I view corporate, litigation, bankruptcy, and real estate as top-level categories of lawyers. There are some others, although those are the big ones. Then, attorneys use the word "commercial" to create a subset (or subcategory) within those categories, except for corporate, where it would be redundant to add the word commercial since corporate attorneys deal with businesses, not consumers.
Hi Brett! Excellent video. This was very simple and helpful. I have an interest in M&A work. I was in the sports field but I am deciding whether to transition into corporate law or investment banking. Which path will give me more exposure to M&A deals? Any advice would be helpful as I make this transition. Thank you again for the video.
Casey, both paths can give you equal exposure, from a quantity standpoint, to M&A deals, assuming you're able to get into the M&A space in each field. My sense is that investment banking is a tougher path to get down. I think there are fewer investment bankers focusing on M&A than M&A lawyers. I may be wrong about that, although that's my sense based on experience and the limited data I've seen. I know there are more lawyers generally (a lot more lawyers than investment bankers), so the possibility of getting a job in some area of law and then moving into M&A seems like it offers more opportunity to break into M&A than going the IB route. Qualitatively, you'll see the deals from both angles (i.e., you'll get a bit of the other job and what they do), at least as you gain experience and move up the chain. In other words, the top M&A lawyers and top M&A investment bankers see a lot of each other's work. At the junior level, that is less true, because they have less time at the "table" (seeing the negotiations go down). And, even at the senior level, they aren't doing each other's work (naturally). So, the investment bankers will see a lot more of how the deal gets put together, priced, financed, sold and the lawyers will understand the intricacies of the deals are documented on paper. As a law student, I thought investment banking was a much more substantive (sexy) job. Now, I don't think that, although if I had to pick one, I'd say that investment banking gives you a bit more overall exposure to how M&A deals get done because of the focus on structure, price, and financing.
Thanks for this video. I would like to ask for your advice. I got into a difficult situation and have no experience with it. Topic: What happens to the money of small investors in the event of a SPAC merger failure. -What is happened if a SPAC Merger fails? SPAC Company, THUNDER BRIDGE ACQUISITION II, LTD - announced its intention to merge with INDIE SEMICONDUCTOR last year (2020) to bring it listed on NASDAQ stock exchange in 2021 first quarter. But an investigation has been launched against the blank check company, saying that "the shareholders have not been properly informed and small investors will have little stake in the formed, new company. After the merger". > 1.If the merger fails, what happens? Small investors lose their invested capital either return to a low share price and "their invested capital get stuck in this SPAC, "blank check company" ?, I do not understand why an investigation is launced against SPAC with the reason that small private investors can only have wenig stake (prozent) in new company after the Merger because the small investors do not think rhey could more have in it, for them is not point, they are not interesed in how much prozent they can have in a very big company. The ones who are "big companies" like financial companies, funds want to have more in a SPAC, but not private small investors. > 2. What should I do in this case if the stock price has already dropped so much that it is lower than the average of my buying price? Thanks for help, answers,
3rd question how to find understandable donations and resources to accept certain treaties being broken and misunderstanding situations due to out numbered and unable to have any way to protect your chosen allies and family lines.
Sir Within an escrow Is it must to pay the transaction fee for the release of your funds? Why they don't take their fee from escrow wallet of the seller?
Who pays the escrow fee depends on the agreement of the parties. Escrow fees are often split evenly between the buyer and seller, although it varies. While most escrow agents will want to be paid before funds are released, technically the fees are not paid to release the funds. The fees are paid for the escrow agent's services generally (and they're often paid upfront)
Many corporate lawyers who want to leave their firm, go work for a client in its legal department. Where would an M&A attorney generally go? To a buyer they represented in the past or to an investment banker who has brokered many deals the law firm was involved with?
An integration plan (formal and written) and a dedicated integration group/team are key. For small deals, a checklist may suffice. For large M&A deals, the integration plan will (if done properly) be fulsome (lengthy). The plan should have clear goals (defined by metrics) and milestones that are bound by timelines. When it comes to getting deals closed and then integrating acquired companies, in both cases, milestones and timelines are key. The acquirer needs to stay a little flexible but success is defined by making hard choices with imperfect information and mainly sticking to the script. Another "tool" is incentive compensation--bonuses to get key contributors to stick around. Does this help (or were you thinking of different types of tools)?
Ive always been interested in M&A, however I've always been told that accountants don't usually get recruited for these investment banking positions... Has this been the case through your personal experience or? I'm currently an accounting major and am reading book on M&A / and part of an investment club
Kevin, What you are hearing would be better explained as the investment banks are not interested in a prospective employee because the employee has an accounting background (or finance or economics for that matter). That has some truth to it, especially if you are trying to get into a top bank straight from undergrad. They figure they can teach you everything you need to know about finance, modeling, etc. as long as you are sharp and curious. However, the investment banks still hire a lot of undergrads who studied finance, accounting, or economics (or that majored in business admin or a similar type field). I would be shocked if that isn't the majority of who they hire (not because it's what matters to the banks but because those are students who are much more likely to desire to work in IB). So, it isn't a turn off that you have an accounting background, it's just not that big of a turn on for them. Don't expect to get too far by selling them on what you know because of what you studied. They likely will not care about that or may even think you'll be less teachable if you focus on how much you have already learned. Use your background to sell your desire to be in finance (investment banking). I got into M&A first as an attorney. I was recruited to do corporate development (this can mean many things, although for our publicly-traded company it was making venture capital investments and identifying and closing acquisitions). The move from law to corporate development (or investment banking) is not easy as an attorney, although it's not rare either. It happens more in strong employee markets (I moved when Dotcom 1.0 was blowing and going). Now, my M&A work is for my own M&A advisory (and law firm -- both lawyer and M&A broker).
DIY legal for a 9m deal 😂 Watched two of your vids now. Really like your channel. We should connect. I make m&a videos from an acquisitions entrepreneur POV -Jason
Hey Mr. Cenkus, thanks for the great information. I'm doing creative research for a story that has elements of corporate law involved. I'm looking for accuracy. Specifically, let's say a company is trying to buy out one of its competitors. For instance, a product packaging company wants to buy out another product packaging company. From the legal perspective, what would be the core differences between a product packing company buying out another product packing company as opposed to a department store buying out another department store? Or is it all the same? Besides the obvious difference in the type of business it is.
Nick, 90%+ of an M&A deal is not industry specific (i.e., it doesn't matter what industry the buyer or seller is in). Significant things that can commonly vary by industry are company valuations (e.g., technology companies sell for higher multiples than service companies), deal structures (i.e., certain types of businesses are more commonly transferred by selling the stock/equity of the company vs. its assets vs. through a merger), regulatory considerations (i.e., some industries are more heavily regulated than others, which leads to additional buyer due diligence and more brain damage around transferring licenses), and risk exposure generally (i.e., some industries are more prone to litigation than others, which, as with heavy regulation, generally leads to increased buyer due diligence and the use of risk mitigation tools (e.g., buyer holding back from the purchase price a larger escrow from indemnity claims post-closing).
Thank you for this, I’m looking to soak up as much as possible and potentially hiring a coach in that middle market, are there any coaches that you recommend or a course that can help me to be adequate enough to start talks with partners and Investors? TIA!
Hi, Frank. You can find contact info for me at cenkuslaw.com. Regarding your question about whether a board is always required for M&A deals, the context (M&A) is not the key consideration. The key issue is the type of entities involved. Almost all corporations have boards of directors and a board of directors will be heavily involved in approving any M&A activity. If a buyer or seller runs their business as an LLC, there is not a board of directors. There is sometimes an equivalent (a board of managers), although not always. So, it depends on whether the buyer and seller are corporations or something else.
That's one of about a dozen celebrity mugshots that were more tightly arranged in a wall collage until about a year ago when one fell down and a couple of others shifted, i.e., the project is falling apart, and I haven't decided to fix it or do something different. Jane Fonda, Kurt Cobain, Al Capone, Jim Morrison, Johnny Cash, and Frank Sinatra are some of the other featured celebs.
New subscriber here! Love your channel and the insight you give to viewers. I do have a quick question for you regarding your education. I noticed you stated you graduated from Harvard. In your opinion with the exorbitant cost of say a T20 school... Would you take on the debt? or If you can self pay and receive scholarships to a lower ranked state school (ranked 50-75) would you go that route? Thanks for your time!
Most corporate lawyers handle M&A transactions, although for a lot of lawyers at smaller firms (local, small regional), M&A isn't a huge part of what they do, which means it can take years and years and years until a lawyer at one of those firms acquires deep experience (possibly, if they just do the occasional deal here and there, they will never acquire a deep level of expertise) and they may have challenges trying to move into larger, more sophisticated deals. So, I think a more clear path if being involved in M&A is THE focus would be to work for a larger firm where M&A is a huge part of what they do and they have an entire department devoted only to M&A. There are small boutique firms, too, so large AmLaw 100 firms aren't the only viable path, although they are a common path and they offer solid training, which means the experience will be recognized by other M&A professionals as valuable.
In an acquisition, the acquiring company have requested that the MD (who is a shareholder of the company being acquired) becomes the new MD of the acquiring company and the MD and his partner have been allotted 10% equity (which equals one seat on the Board of directors). Can the MD nominate another board member to represent its shareholding interest or does the one seat equal the MD's seat on the board? I will appreciate your view on this.
Generally, the directors are voted on by the shareholders as a group. There are different methods of voting -- straight and cumulative (a minority shareholder protection tool), and different voting standards -- plurality and majority. In each case, though, by default in U.S. corporations, all shareholders vote for all directors and a 10% shareholder will not be able to singlehandedly carry the vote for a board member unless the board is quite large and they use cumulative voting. Because that's how it would work by default, when I hear that the 10% equity equals one seat on the board, it likely means that they are giving the 10% equity holder the right to appoint one director to represent the 10% equity's interests by getting the other shareholders to all agree to vote for the nominee appointed by the 10% shareholder (in a shareholders agreement or similar document). From what little you have told me, I'd expect that is all the 10% equity will get. I don't read any of the information you provided to suggest there would be a second director under their control. They can "nominate" other directors, although they'd likely only be voting along with the other shareholders for those other directors (i.e., voting their 10% minority interest, which won't carry that much weight). And it is possible that the company will give other shareholders a similar right (to singlehandedly appoint directors to represent their own interests) and leave no (or few) directors for general voting among the shareholders broadly.
We have a deal on the table right now. Our shelf company (WY) is purchasing a company (MI) $$22.5M LBO, seller will take Note over three years. We will use this Company to ge Public to purchase two relate construction companies value at $70M each. Be nice to speak with you on these deals.
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I love the way you speak about your job and this profession. It seems you take pride in this and are genuinely interested. Yeah this job is tough but I'm glad there are lawyers like you. And thanks for sharing!
Yes! He's so inspiring and enjoyable to watch.
I AGREE!! Love to see more people talk about what they love especially in business
Thank you for such positive feedback!
222 likes
Knowledge gained from your 13 minutes video > my 3-month M&A internship. Thank you for the quality content!
You're welcome, Seyma!
...how is that possible
hello dear can you help me in finding merged and acquired companies list I am in need of it. Thanks
Where the hell did you work 😂😂
The Krusty Krab@@bishoyhanna3949
Can a person not understand his clarity, and thoroughness. Very great presentation!
Thank you, Alex!
It’s pretty clear why you’re at such a high level your personality and crystal clear way of speaking is something of great value for any business or corporation
Thank you so much for the explanation! You're fresh and smart, pleasure to watch!
you're welcome and thank you for the positive feedback!
She want some of them M's 💲💲💲💲💲
Well done. That was a good solid introduction to what M&A is. Great job.
Killed it! I saw the complete video and read all the comments and your detailed response to most of them. I must say it would be a priviledge for your clients and the people who work with you with such a clear guidance. The detailed responses were very informative and worthy. I personally learnt a lot.
Kudos from India!
Thank you, Tushar!
I am HOOKED, oh man what a great video series. So happy to find your channel, Brett!
You're welcome, Ross - glad you are enjoying the channel!
As other people have mentioned, I love the way you talk about your job. Thanks for sharing your knowledge.
thank you, Arnaud
Just transitioning into a corporate and commercial legal counsel/secretary. I am glad I found this Chanel.
thank you, Rosemond!
This is amazing! I have always been interested in mergers & acquisitions, basically business law. Great video!
thank you, Daniel! Glad you enjoyed it.
@@BrettCenkus I have a question. If you were getting into M&A today, what are the industries you would recommend. Thanks. Great vid.
Love the way this guy talks
I thought this is on murders and executions.
An understandable mistake!
😂😂
😂
Ahahah
😂😂😂
Very clean speaker. So easy to understand. Great video
Thank you, Gavin!
Impressive. Pretty a rookie on this!
I just didn't know about M&A but your explanation is a mark of a guru.
Well done Sir, that to me is a truly definition of the state of the art!
Looking forward for brighter business days ahead
Thank you, Isaac!
Solid explanation about Mergers and Acquisitions. I've always been interested in m&a and business law in general. Great video!
thank you, Andre!
Hi Brett, I am a law school student with my 1st “big law” internship coming this summer. I am interested in transactional/M&A type of practice and wanted to know what I can do to prepare. Any book recommendations or any other tips would be super helpful! Thank you
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Finally some sweet M&A content. Big up Brett
thank you!
I'm wanting to like this twice
You seem so kind and genuine. Also I love how you explain things! Thank you so much for this! I worked in the legal sector for a long time but I am only now thinking about becoming an M&A lawyer! thank you :)
You're welcome!
You're welcome, Larissa!
Considering going back to school for either accounting/finance BA or Law School for Transactions/Real Estate/and Tax Law. I wanted to ask if you have any recommendations for law school, the profession and learning how to prepare these documents or resources to learn this material? Is there any information you can provide with a day in the life as well? Thanks
Thank you very much, Mr Cenkus. Very informative presentation. I have a question - do investment banks help their clients identify and find potential acquisition targets? I give you an example of what I mean - let's say I have a commercial bank and I want to expand its operations by acquiring other banks. Can I instruct my investment banker to find all the commercial banks which fit the criteria laid out by me (e.g., size of the assets, geographical location, number of branches,etc), then approach their owners and start negotiating the acquisition?
@2:38 is interesting.
Wondering why people say consultants charge more for a merger, when it seems we can do it ourselves.
What exactly are they charging so much for?
Perfect video. The best explanation of M&A on the web.
thank you for the feedback!
I feel thankful to have found your channel.
thank you, Siddhant!
Hi. Is it normal to ask employees, directors etc. To sign an undertaking whereby they are prohibited from buying buying shares of a listed company for a certain time period until the deal goes public? At what point do I ask for such undertaking? At the due diligence stage or at the initial offer stage?
Interesting stuff! Did you start off in business school and then make the switch into law?
Troy, I haven't gone to b-school (although my undergrad work was in Economics, so that's in the ballpark). When I was applying to grad schools in 1995, there was a zero chance any quality business school would take me from Messiah College and with one year of experience in the business world (probably not very likely today either!) So, I went to law school, never really intending to be, or identifying as, a lawyer. I've always loved business. I love finance, strategy, entrepreneurship. I've read tons and tons of books, self-studied, analyzed businesses - those are the sorts of things/topics where I lose track of time easily. Over the years, I've come to enjoy and identify with my lawyer role more, although I still gravitate toward the business side of things -- why deals get done, the financials, the people issues, etc.
Corporate paralegal here, thanks for the video! I’ve found: always look for liabilities in restricted stock units to employees or consultants the seller has retained.
Where did you start to get that job?
Thank you so much Brett! I have an upcoming interview for an internship in Transaction Advisory Services - M&A with one of the BIG 4 this week and I wanted to ask to what extent their work is different from what you do. What advice can you give me for the interview itself regarding more theoretical questions? Thx again!
Philipp, I'm a bit behind circling back to your question and, because of that, I may have missed the opportunity to help you before your internship interview. Still, your question is a good one with broad relevance so I will answer it now anyway. Transaction advisory services at the Big 4 is similar to investment banking. Your job would be primarily a marketing and sales position with a heavy finance component. You would be more heavily involved in preparing a business for sale, marketing it, and negotiating the terms of a deal. You would also often play a key role in shepherding a deal toward closing -- a project management-type role. M&A lawyers get more heavily involved once the deal is struck (often once a letter of intent is signed) and their job is more about documenting and closing the deal than the strategic negotiation and structuring of the deal. It is sometimes different for me given my background on the M&A deal and finance side (non-law) side of thing, although clients don't typically look to their lawyer for guidance on the value of their business. They look to their lawyer for advice about the legal and tax ramifications of structuring an M&A deal one way vs. another (asset sale vs. stock sale vs. merger). That's probably the best way to put it -- transaction advisory services and investment banking is about pricing and marketing M&A deals and M&A law is about documenting and closing the deals. There is overlap, although there is still a distinct diving line somewhere in there.
Wow that was a great answer for me and I didn’t even ask the question
Thank you Brett Cenkus, for the magnitude of value you share with us. I have a question, if you could shed some light:
How could a potential buyer incentivize a broker to “recommend” 100% seller finance to the seller?
Thanks in advance.
Does dividend policy affect M & A.
Thanks for d explanation
Whats ur thoughts on mutual NDA signing prior to the discussion of a merger? anything should watch out for? or its completely normal and safe?
It is typical and generally safe. If you are the potential seller, be sure that confidential information does not need to be stamped CONFIDENTIAL, and be certain there is not a waiver of consequential damages. Those waivers are common in commercial agreements but not appropriate with NDAs since the type of damages you would incur if a party disclosed your confidential information in violation of an NDA would likely be classified as consequential.
@@BrettCenkus appreciate your response
@@AcethemOfficial You're welcome
Thank you for the clear explanation. Well, put.
Hey Brett! Do you also handle the financial due diligence?
This is a great video, I’m trying to get into the focus of M&A. If you have any recommendations please share!
Good presentation overall; experience shows.
Do you have a presentation on rules around m&a in which a government contract is involved?
Heyy Brett I wanted to ask when buying a business, how is the initial contact made is it by writing out letters and sending it out to the business owners or by sending e-mails to them? Thanks👍
Typically, a prospective buyer would reach out to a target company that isn't "on the market" by calling them. If they send an email, it is usually to schedule a phone call as a phone call is the preferred forum to discuss whether or not a target company has any interest in exploring a possible sale. FYI, that type of email is intentionally vague in case an employee who would not otherwise be told about a pending M&A reads it. The email might request a call to discuss a "possible strategic transaction." Depending on the sender's objective credibility/status, the sender may need to keep calling or be more candid in the email wording since the recipient may be less inclined to schedule a phone call with a sender they know nothing about
You are so clear at the explanation of this topic! Thank you very much for making me understand it!
You're welcome, Arsela!
Thanks for providing overall idea about M&A.
You're welcome, Sathiyan.
Hey! Im just one to ask how can I analyzation of the impact of coronavirus crisis on merger and acquisition?
I’m currently a third year law student in New Zealand. Do you think it’s appropriate to describe mergers, acquisitions and takeover as company law? Do you think it leans towards more of contract law?
Taylor, I am not certain in New Zealand, although I would think it leans more towards contract law. I would expect company law to deal more with corporate governance and regulation.
is there an effective way to research mergers, as in articles of combination between one company taking over another. So if you think in terms of banking and financing. Banks buying other banks?
Great video Brett.
I am wrapping up my grad school in Finance and looking to join M&A. These videos are very helpful. Thank you !
you're welcome, Ibrahim. Are you graduating in December? Good luck down the final stretch!
Can you talk about what is needed to start an escrow account and submitting the escrow agreement to the bank?
Given your experience in the field, do you have any suggestions for students earning a business degree on the specific route they can take that would be most helpful in getting into this field?
Also, what are some of the things you enjoy about what you do?
I watched your video (leaning) towards the 10 steps for the selling company. You mentioned the info might be used by the buyer also.
A private buyer with intent to acquire a five million dollar company, how do the steps differ if at all? I live in the Caribbean region. Most laws here are similar to the US if not more lenient.
How do I begin the process (contact said company) without negative response?
You are working with a client as a Chief Technology Officer, and you have produced a graph to help your client understand how each of the investment accounts will behave over time. Write your client a report outlining an investment forecast and recommending in which type of account they should invest.
In your report, to support your claims you should use comparisons of the data and an explanation of the chart trendlines on the next tab. Address whether the client is looking to invest short term (five years or less) or long term (longer than five years).
Which of the chart types on the following Excel page, titled “Chart Types” will be most useful for supporting your recommendations? Why?
can you answer that question please?
Hello, I’m currently doing research for a paper I’m writing for my college admission.
I’m writing a research paper on Tenant landlord evictions that focuses on landlords/owner of the property in an active M&A with open eviction cases during this process.
1. Why would a stock price Change from $25 to $0.01 During an M&A
2. When does the Ownership Change?
3. Does the Ownership change
During the M&A or is it the transfer/purchase of Stocks, assets or both?
3. Where can I find citations , statutes, codes that refer to my first 2 questions?
Any references, cases that you can refer me to would be greatly appreciated.
Hey Brett. I really appreciate your videos. Just wondering if jurisdiction constrains your reach, by that I mean, could you structure a deal say in Toronto or some foreign country? Thanks
Jurisdiction does not constrain our reach, although it reduces available opportunities (deals that we might work on) for a few reasons, including because (a) a lot of business owners still shop for professional services locally, and (b) if a deal has a very strong real estate or regulatory component--both of which are decidedly local subjects--we may not be a great fit.
@@BrettCenkus I agree with the locality argument but that's becoming obsolete hence our current dialogue via RUclips. I was debating whether to complete a JD/MBA to complement my entrepreneurial plans but I'll leave the legality to the experts. I'll contact you when as soon as required. Thanks Brett.
@@thobbes9994You're welcome.
Great video. What industries would you recommend someone look into for acquisitions?
do you mean what industries do I think are hot / ripe for picking up companies (good opportunities to be an M&A buyer)?
@@BrettCenkus Yes.
@@BrettCenkus Oh, and thanks for the reply. I am pleasantly surprised. Also, regarding the industries, I am looking at being in this business for the long haul, 15-20 yrs, at least. So, this being a rapidly changing world, this plan factors into the industry I will choose. I was planning to do healthcare, but I am not thrilled with this industry as a long term play for me. Manufacturing seems like viable option. Again, any feedback world be appreciated.
Hey Brett, I was wondering if you could summarise in a short clip; "Why mergers and acquisitions fail?" ?
Drake, I will create a video about that topic soon. It is a great one! Thank you for the suggestion.
So if my company gets an acquisition what sec form should I file?
What is the difference between commercial and corporate lawyers? Or is commercial lawyer simply an umbrella term for all lawyers that deal with issues that relate to businesses?
Jenny, great question!
I generally see the word "commercial" used to qualify a specific type of lawyer, e.g., commercial litigator or commercial real estate attorney. Used in that way, it means the attorney deals with businesses, not consumers.
I would not go so far as to say that word is an umbrella term for all lawyers that work with businesses. Case in point -- I do not use that term or think of myself as a commercial lawyer, even though the work I do is entirely for businesses.
I view corporate, litigation, bankruptcy, and real estate as top-level categories of lawyers. There are some others, although those are the big ones. Then, attorneys use the word "commercial" to create a subset (or subcategory) within those categories, except for corporate, where it would be redundant to add the word commercial since corporate attorneys deal with businesses, not consumers.
@@BrettCenkus thanks a lot Brett very helpful :)
@@nicki35able000 You're welcome.
Hi Brett! Excellent video. This was very simple and helpful. I have an interest in M&A work. I was in the sports field but I am deciding whether to transition into corporate law or investment banking. Which path will give me more exposure to M&A deals? Any advice would be helpful as I make this transition. Thank you again for the video.
Casey, both paths can give you equal exposure, from a quantity standpoint, to M&A deals, assuming you're able to get into the M&A space in each field. My sense is that investment banking is a tougher path to get down. I think there are fewer investment bankers focusing on M&A than M&A lawyers. I may be wrong about that, although that's my sense based on experience and the limited data I've seen. I know there are more lawyers generally (a lot more lawyers than investment bankers), so the possibility of getting a job in some area of law and then moving into M&A seems like it offers more opportunity to break into M&A than going the IB route. Qualitatively, you'll see the deals from both angles (i.e., you'll get a bit of the other job and what they do), at least as you gain experience and move up the chain. In other words, the top M&A lawyers and top M&A investment bankers see a lot of each other's work. At the junior level, that is less true, because they have less time at the "table" (seeing the negotiations go down). And, even at the senior level, they aren't doing each other's work (naturally). So, the investment bankers will see a lot more of how the deal gets put together, priced, financed, sold and the lawyers will understand the intricacies of the deals are documented on paper. As a law student, I thought investment banking was a much more substantive (sexy) job. Now, I don't think that, although if I had to pick one, I'd say that investment banking gives you a bit more overall exposure to how M&A deals get done because of the focus on structure, price, and financing.
Thanks a lot for great explanation, just found out what I like to do next thanks to you !!!
Very helpful/educative information. Thanks for sharing!
you're welcome!
Thanks for this video.
I would like to ask for your advice.
I got into a difficult situation and have no experience with it.
Topic: What happens to the money of small investors in the event of a SPAC merger failure.
-What is happened if a SPAC Merger fails?
SPAC Company,
THUNDER BRIDGE ACQUISITION II, LTD - announced its intention to merge with INDIE SEMICONDUCTOR last year (2020) to bring it listed on NASDAQ stock exchange in 2021 first quarter.
But an investigation has been launched against the blank check company, saying that "the shareholders have not been properly informed and small investors will have little stake in the formed, new company. After the merger".
> 1.If the merger fails, what happens?
Small investors lose their invested capital either
return to a low share price and "their invested capital get stuck in this SPAC, "blank check company" ?,
I do not understand why an investigation is launced against SPAC with the reason that small private investors can only have wenig stake (prozent) in new company after the Merger because the small investors do not think rhey could more have in it, for them is not point, they are not interesed in how much prozent they can have in a very big company.
The ones who are "big companies" like financial companies, funds want to have more in a SPAC, but not private small investors.
> 2. What should I do in this case if the stock price has already dropped so much that it is lower than the average of my buying price?
Thanks for help, answers,
3rd question how to find understandable donations and resources to accept certain treaties being broken and misunderstanding situations due to out numbered and unable to have any way to protect your chosen allies and family lines.
Pleasure to watch, thank you Sir
Glad you enjoyed it!
Do u provide services in Canada and other parts of world as well ?
Excellent presentation
hello sir.I need mergers and aquisition companies list for my resarch. Where I can find this list?
Awesome video Brett, loved watching this 🙏
Thank you, Aaron
What if you are interested in a local competitors business as a silent investor? Thanks.
Sir
Within an escrow Is it must to pay the transaction fee for the release of your funds? Why they don't take their fee from escrow wallet of the seller?
Who pays the escrow fee depends on the agreement of the parties. Escrow fees are often split evenly between the buyer and seller, although it varies. While most escrow agents will want to be paid before funds are released, technically the fees are not paid to release the funds. The fees are paid for the escrow agent's services generally (and they're often paid upfront)
Hey Brett, thanks for such a clear explanation. I learned a lot!!!!
You're welcome, Rashid. Thank you for letting me know the video was helpful to you!
Many corporate lawyers who want to leave their firm, go work for a client in its legal department. Where would an M&A attorney generally go? To a buyer they represented in the past or to an investment banker who has brokered many deals the law firm was involved with?
Hi Brett, What Tools would a business need for successful integration ?
An integration plan (formal and written) and a dedicated integration group/team are key. For small deals, a checklist may suffice. For large M&A deals, the integration plan will (if done properly) be fulsome (lengthy). The plan should have clear goals (defined by metrics) and milestones that are bound by timelines. When it comes to getting deals closed and then integrating acquired companies, in both cases, milestones and timelines are key. The acquirer needs to stay a little flexible but success is defined by making hard choices with imperfect information and mainly sticking to the script. Another "tool" is incentive compensation--bonuses to get key contributors to stick around. Does this help (or were you thinking of different types of tools)?
@@BrettCenkus That is Brilliant thank you very much
@@herbertmcclay2322 you're welcome!
Man! Thank you for this video. So valuable
You're welcome, Carlo!
Do you have a video on Business sale structure?
Yes, a few of them. Here is one - ruclips.net/video/ASUM5illI98/видео.html
Thanks Brett!
Your content is great and your speedy response is greatly appreciated!
Jerry Marlow
Thank you Brett !
You're welcome!
Sounds so simple. What is the hardest part about this job?
Brokers, corporate lawyers, mergers ,what is it that one person can't do this all lol
Ive always been interested in M&A, however I've always been told that accountants don't usually get recruited for these investment banking positions... Has this been the case through your personal experience or? I'm currently an accounting major and am reading book on M&A / and part of an investment club
Kevin,
What you are hearing would be better explained as the investment banks are not interested in a prospective employee because the employee has an accounting background (or finance or economics for that matter). That has some truth to it, especially if you are trying to get into a top bank straight from undergrad. They figure they can teach you everything you need to know about finance, modeling, etc. as long as you are sharp and curious. However, the investment banks still hire a lot of undergrads who studied finance, accounting, or economics (or that majored in business admin or a similar type field). I would be shocked if that isn't the majority of who they hire (not because it's what matters to the banks but because those are students who are much more likely to desire to work in IB).
So, it isn't a turn off that you have an accounting background, it's just not that big of a turn on for them. Don't expect to get too far by selling them on what you know because of what you studied. They likely will not care about that or may even think you'll be less teachable if you focus on how much you have already learned. Use your background to sell your desire to be in finance (investment banking).
I got into M&A first as an attorney. I was recruited to do corporate development (this can mean many things, although for our publicly-traded company it was making venture capital investments and identifying and closing acquisitions). The move from law to corporate development (or investment banking) is not easy as an attorney, although it's not rare either. It happens more in strong employee markets (I moved when Dotcom 1.0 was blowing and going). Now, my M&A work is for my own M&A advisory (and law firm -- both lawyer and M&A broker).
This is gold. I would have to pay for this in my state over a consultation
thank you!
a great chunk of thanks for sharing and explaining the business matters, highly appreciated
you're welcome!
DIY legal for a 9m deal 😂
Watched two of your vids now. Really like your channel. We should connect. I make m&a videos from an acquisitions entrepreneur POV
-Jason
yeah, crazy, right?! Happy to connect
Hey Mr. Cenkus, thanks for the great information. I'm doing creative research for a story that has elements of corporate law involved. I'm looking for accuracy. Specifically, let's say a company is trying to buy out one of its competitors. For instance, a product packaging company wants to buy out another product packaging company. From the legal perspective, what would be the core differences between a product packing company buying out another product packing company as opposed to a department store buying out another department store? Or is it all the same? Besides the obvious difference in the type of business it is.
Nick, 90%+ of an M&A deal is not industry specific (i.e., it doesn't matter what industry the buyer or seller is in). Significant things that can commonly vary by industry are company valuations (e.g., technology companies sell for higher multiples than service companies), deal structures (i.e., certain types of businesses are more commonly transferred by selling the stock/equity of the company vs. its assets vs. through a merger), regulatory considerations (i.e., some industries are more heavily regulated than others, which leads to additional buyer due diligence and more brain damage around transferring licenses), and risk exposure generally (i.e., some industries are more prone to litigation than others, which, as with heavy regulation, generally leads to increased buyer due diligence and the use of risk mitigation tools (e.g., buyer holding back from the purchase price a larger escrow from indemnity claims post-closing).
@@BrettCenkus Thank you for the detailed response. I sincerely appreciate your time.
@@nickcise9049 yw, Nick. Feel free to reach out if you have further questions. Best success with the story!
Do i need an LLc to apply for an SBA loan for an acquisition?
Thank you for this, I’m looking to soak up as much as possible and potentially hiring a coach in that middle market, are there any coaches that you recommend or a course that can help me to be adequate enough to start talks with partners and Investors? TIA!
Great video, how can I contact you? And is a board always required for M&A Deals?
Hi, Frank. You can find contact info for me at cenkuslaw.com. Regarding your question about whether a board is always required for M&A deals, the context (M&A) is not the key consideration. The key issue is the type of entities involved. Almost all corporations have boards of directors and a board of directors will be heavily involved in approving any M&A activity. If a buyer or seller runs their business as an LLC, there is not a board of directors. There is sometimes an equivalent (a board of managers), although not always. So, it depends on whether the buyer and seller are corporations or something else.
Thanks, great summary! Have to ask though, why the Elvis mugshot in the background?
That's one of about a dozen celebrity mugshots that were more tightly arranged in a wall collage until about a year ago when one fell down and a couple of others shifted, i.e., the project is falling apart, and I haven't decided to fix it or do something different. Jane Fonda, Kurt Cobain, Al Capone, Jim Morrison, Johnny Cash, and Frank Sinatra are some of the other featured celebs.
Very informative! Thank you
you're welcome
Hey there, very interesting. Tell me how Investors do not use money out of pocket for LBOs?
Very clear. Thank you!
You're welcome!
New subscriber here! Love your channel and the insight you give to viewers. I do have a quick question for you regarding your education. I noticed you stated you graduated from Harvard. In your opinion with the exorbitant cost of say a T20 school... Would you take on the debt? or If you can self pay and receive scholarships to a lower ranked state school (ranked 50-75) would you go that route? Thanks for your time!
I recently learned a bit of this world in my bankruptcy law class. Where would you suggest someone get started after they graduate?
Most corporate lawyers handle M&A transactions, although for a lot of lawyers at smaller firms (local, small regional), M&A isn't a huge part of what they do, which means it can take years and years and years until a lawyer at one of those firms acquires deep experience (possibly, if they just do the occasional deal here and there, they will never acquire a deep level of expertise) and they may have challenges trying to move into larger, more sophisticated deals. So, I think a more clear path if being involved in M&A is THE focus would be to work for a larger firm where M&A is a huge part of what they do and they have an entire department devoted only to M&A. There are small boutique firms, too, so large AmLaw 100 firms aren't the only viable path, although they are a common path and they offer solid training, which means the experience will be recognized by other M&A professionals as valuable.
@@BrettCenkus thank you!
Great video - very well explained! Thanks for posting!
I found that really interesting, I’m looking at learning to become the origination Support for the M&A partner.. I have a lot to learn.
Thank you so much great video 🙌
Can you please refer me to a recommended investment banker in the US? 35-$50m M&A. Thanks
In an acquisition, the acquiring company have
requested that the MD (who is a shareholder of the company being acquired)
becomes the new MD of the acquiring company and the MD and his partner have
been allotted 10% equity (which equals one seat on the Board of directors). Can the MD nominate another
board member to represent its shareholding interest or does the one seat equal
the MD's seat on the board? I will appreciate your view on this.
Generally, the directors are voted on by the shareholders as a group. There are different methods of voting -- straight and cumulative (a minority shareholder protection tool), and different voting standards -- plurality and majority. In each case, though, by default in U.S. corporations, all shareholders vote for all directors and a 10% shareholder will not be able to singlehandedly carry the vote for a board member unless the board is quite large and they use cumulative voting. Because that's how it would work by default, when I hear that the 10% equity equals one seat on the board, it likely means that they are giving the 10% equity holder the right to appoint one director to represent the 10% equity's interests by getting the other shareholders to all agree to vote for the nominee appointed by the 10% shareholder (in a shareholders agreement or similar document). From what little you have told me, I'd expect that is all the 10% equity will get. I don't read any of the information you provided to suggest there would be a second director under their control. They can "nominate" other directors, although they'd likely only be voting along with the other shareholders for those other directors (i.e., voting their 10% minority interest, which won't carry that much weight). And it is possible that the company will give other shareholders a similar right (to singlehandedly appoint directors to represent their own interests) and leave no (or few) directors for general voting among the shareholders broadly.
@@BrettCenkus Thanks a lot Brett. This is very helpful
I wish you would start making videos again. These are great.
We have a deal on the table right now. Our shelf company (WY) is purchasing a company (MI) $$22.5M LBO, seller will take Note over three years. We will use this Company to ge Public to purchase two relate construction companies value at $70M each. Be nice to speak with you on these deals.
Thank you for the time and effort you put to share this knowledge. Very helpful
you're welcome, Ehab
Nice to know you and well presentable materials. THANKS!
thank you, Hashem!
Appreciate your crash course. Loved your simply stated approach.
Thank you!
Hello Brett, loved your informative videos. Many thanks for sharing. Greetings from Germany, Soreb PS: Channel subscribed glaldy!
It was a nice outlook about the overall topic..
Great video, Brett!