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Exit Strategies for Technology Companies

Posted on Oct 21, 2015 in Technology Transactions, Blog5

On October 7, 2015, VLP Law Group, in sponsorship with Grant Thornton, hosted “Exit Strategies for Technology Companies: How to be Prepared When the Opportunity Arises” at the Grant Thornton offices in Iselin, New Jersey. It was VLP’s first official event in New Jersey, where the Firm practices under the name “VLP Law Group, Everhard and Hong LLC.”

The event focused on the active M&A market for life science and technology companies, featuring a panel of investment bankers and industry professionals discussing market trends, best practices and impressions of the current deal environment. Conrad Everhard, a corporate partner at VLP in the New York Tri-State area, served on the panel.

The panel led a discussion on a broad range of topics beginning with an overview of the current state of the market – focusing particularly on the NYC metro market. The panelists examined the sectors that have been particularly active or not as active and how this activity will impact technology entities planning for an exit strategy, as well as the impact on potential acquirers. Panelists also gave an overview of valuation methodologies, addressing topics such as:

  • Should entities expect to have market participants focus on projected revenue growth or projected free cash flow when valuing an entity?
  • How would you expect to value the entity proposed for sale?
  • What can an entity do or prepare to do in order to best position their market value?

The M&A process was also examined, looking at how transactions are normally structured, including cash flow earn-out, contingent consideration, warrants and option replacements. There was also a discussion on what to expect during the different phases of the selling process: due diligence, definitive documentation and closing, as well as the representations and indemnities that are requested and typically expected with any sale.

Finally, the panel looked at negotiating the deal, giving best practice tips on choosing the right advisors to assist in a sale, maximizing leverage for sellers, common pitfalls to be avoided, as well as “war stories” from their vast experience.

Click Here to view upcoming VLP events.

Conrad Everhard is a seasoned corporate and transactional attorney with over twenty years of big law firm and general counsel experience. Conrad counsels his clients on business matters at every stage of their life cycles, including start-up formation, strategic planning, executive compensation, corporate governance, mergers and acquisitions and all forms of venture capital and private equity transactions.

The VLP Speaks blog is made available for educational purposes only, to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site, you understand and acknowledge that no attorney-client relationship is formed between you and VLP Law Group LLP, nor should any such relationship be implied. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.