Due Diligence in Mergers & Acquisitions
The Value of Government Contracts in Mergers and Acquisitions
Business growth often means branching out into new markets and acquiring the capacity to meet market demands by adding business units through mergers and acquisitions. When the business to be acquired gains some or a considerable portion of its business through government contracts, the acquiring company is well advised to in-depth review of both existing government contracts and pending offers before closing on the business purchase.
When private companies merge, the due diligence that is done prior to the proposed merger may mis-value government contracts on the books if the reviewer is not well versed on the subject. The parties typically take these contracts at face value-but they shouldn’t.
I’m attorney and government contract consultant Jim Rome. I work with small and mid-sized businesses across Illinois and nationwide, advising them on how to obtain government contracts and successfully deliver on those contracts.
If your company is considering a merger or acquisition with a company that does business with local, state or federal government units or agencies, contact my Chicago area office to schedule a consultation. I can help your company prior to a merger or acquisition.
Get an Accurate Valuation of the Assets You are Purchasing
Many business valuators unfamiliar with government contracting assume that the contract is an asset of the company. That is not automatically the case. A succeeding business entity must go through proper governmental procedures. If you don’t cross the t’s and dot the i’s, you could lose the contract and the value you thought you had purchased.
My 40 years of experience as a lawyer working in and with government units gives me insight into the proper valuation of government contracts. With proper due diligence review of government business assets in advance of a business purchase or merger, you can be assured that you do not pay for an asset you cannot maximize.
Government contracting need not be a puzzling exercise; it can be a satisfying and lucrative undertaking. You can start today to build your business with successful government contracts. Contact my Chicago area law office or call 847.917.3540 to schedule a consultation.
Your time is valuable. For you convenience, I can meet at your office, home, or any location convenient for you.