Choosing your M&A team is a critical step in your M&A journey. The legal counsel that you select will have an impact on your process, so choose your law firm carefully. Your current corporate counsel may not be the best equipped to handle a software and technology M&A transaction. Some things to consider and questions to ask a firm are below:
- Does the firm currently do Software and Technology M&A?
- Does the firm have a specialty practice in technology?
- Does the firm currently represent sellers or buyers in M&A transactions?
- What are examples of recent transactions that they have done?
- Can the firm describe a recent M&A transaction and the types of issues that arose during the transaction?
- Does the firm represent private equity or venture capital firms?
- What size sell-side transactions do they do?
- Where are they located?
- Are they local, regional or global?
- Can you speak with a client?
- Are there any conflicts of interest based on the types of clients that the firm represents?
- What is the firm’s intellectual property experience?
- Can the firm handle cross-border intellectual property language in an asset purchase agreement or stock purchase agreement, or will local counsel need to be retained?
- What is the firms specific tax experience when it comes to cross-border transactions?
- What is their experience with representations and warranty negotiations?
- What is their experience with indemnification negotiations?
- How do they charge for their services?
- Will they do a fixed fee engagement?
- How much should you budget for a transaction?
This is not an all-inclusive list. However, you can get a sense of the types of questions and areas you should explore when selecting M&A counsel.
For reference, here is a link to a recent Stock Purchase Agreement between two software companies that is publicly available since the acquirer was a Canadian publicly-traded company. The transaction counsels were a national Canadian firm for the seller and an international firm for the buyer. This agreement is instructive and I encourage you to look at the terms around reps and warranties, indemnity and assignment.
Reviewing this agreement and talking to potential law firms about the items above will provide you with a lot of insights on the legal aspects of a M&A transaction.