What M&A Lawyers Want CEOs to Know About Selling Their Companies

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Mario Nigro is one of Canada’s preeminent M&A lawyers, and currently serves as a Partner in the Mergers & Acquisitions and Private Equity & Venture Capital Groups at Stikeman Elliot based out of Toronto.

His practice focuses on mergers and acquisitions, financings, complex corporate reorganizations, and general business law. Mario has extensive experience working with private equity and venture capital firms on sophisticated transactions including acquisitions and dispositions. He has also worked on a variety of private equity fund transactions including buyouts, leveraged buyouts, and secondaries for leading private equity firms.

Mario routinely advises owner operators who are looking to sell both minority and majority positions in their businesses, and has significant experience across countless industries including food, retail, services, technology, and manufacturing.

Most recently, Mario has worked with a number of fast-growing technology companies through their acquisitions, dispositions, financings and growth capital transactions.

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Specific Questions and When They’re Asked

Preparing for a Sale

(3:33) What are some basic things that a CEO looking to exit within the next 1-4 years should have in place from now, well in advance of actually selling their company?
(11:39) How should a selling CEO select their M&A lawyer among the thousands of lawyers from which to choose? How much should they expect it to cost?

Structuring a Transaction

(17:52) Different Buyers and Sellers differ on their approach to LOIs: Some prefer very detailed ones, others very simple ones. Which one should a selling CEO prefer? Why?
(25:33) How should a selling CEO think about the difference between an asset sale vs. a share sale?
(30:12) What are the most frequent mistakes that selling CEOs make with respect to taxation, and what can they do now to address some of those possible future risks?

Representations and Warranties

(36:18) What are some of the most frequent stumbling blocks or areas of contention when CEOs negotiate the reps and warranties section of a purchase agreement?
(40:14) What Rep and Warranty Insurance? Why would a selling CEO consider using it?

The Deal Process

(49:35) How do you deal with situations in which your counterpart counsel is less experienced or less sophisticated in matters of M&A? Is this a good thing or a bad thing for you?

Transaction Risks

(54:52) What are the 3 most frequent reasons why deals fall apart in the late stages?
(1:03:03) What strategies do acquirors use to manage the large amount of exposure that they often assume when inheriting the employment contracts of the acquired company?

Post-Transaction Considerations

(1:06:37) What are some key terms that selling CEOs should keep their eyes out for when signing a non-compete?

Conclusion

(1:11:45) If you could shout one thing from the proverbial mountaintops, and every SMB Entrepreneur/CEO would fully digest what you’ve said, what would you say, and why?