Hellmuth & Johnson attorney Alec Sherod was featured in the Mergers & Acquisitions Table of Experts in the June 7th edition of the Minneapolis/St. Paul Business Journal. In the piece, Sherod discusses the current state of M&A transactions, the process of buying and selling a business, structuring deals in an effective and efficient way clients, and what the forecast of the market looks like.
Read the full Minneapolis/St. Paul Business Journal story. Select quotes are included below.
“I’m seeing all kinds of buyers. I’ve been involved in recent auction processes where describing both strategic and financial buyers as having a “rabid appetite” for the deal would not be overstating it. There’s still a lot of money on the sidelines, and buyers are being aggressive.”
“As seller counsel you want to include things in the LOI, such as size of the indemnity escrow, but those are hard to determine prior to due diligence. My inclination is to have a fairly simple LOI that addresses what we know.”
“I’ve seen more earnouts in the past few years. It’s used as a way to get additional value to the seller. With valuations being so high, I think there are more buyers proposing it as a component of purchase price. The challenge is drafting a clear earnout so you don’t have post-closing fights.”
“There’s a lot of trepidation about the effect of tariffs on commodity prices. It’s had a very negative impact on all aspects of ag. To the extent that drives M&A activity or the success of the ag industry, I think people are very hesitant to do deals in that space.”