Recent Antitrust Cases

This article from McDermott Will & Emery for Mondaq (free registration required) explains:

"Three recent rejections of government merger challenges may present new opportunities for companies to pursue mergers or acquisitions of competitors in concentrated markets. While every case is fact specific, these cases may demonstrate a shift in antitrust enforcement, with courts permitting transactions that were challenged under the Horizontal Merger Guidelines. We provide below a short synopsis of these cases, and a list of lessons by which these cases can be applied in other industries."

Directors With Specialized Expertise Held to Higher Standard

This article by McDermott Will & Emery from Mondaq (free registration required) explains:

"A recent decision by the Delaware Court of Chancery found a director who was a former investment banker with experience in a particular industry held to a higher standard than non-expert directors in the context of mergers and acquisitions."

The ABC's of Startup Debt Financing

This article by William Payne from BusinessWeek Online explains:

"Securing the capital to push a high-growth startup to the next level can be tricky and confusing. Here is an expert analysis of the options."

How to Work with Independent Contractors

This excellent and comprehensive article by Dave Hecker from SitePoint.com explains how a growing internet business locates, qualifies and engages independent contractors. The information presented is relevant, however, to working with other independent contractors as well:

The article is broken into six parts and is well worth reading in full:

Part 1. Finding Candidates
Part 2. Qualification and Trial
Part 3. Managing Contractors
Part 4. Money and Payments
Part 5. Legal Agreements
Part 6. Working with Offshore Contractors

Raise Capital Privately in PIPE Transactions

This article from McDermott Will & Emery from Mondaq (free subscription required) explains the basics of PIPE transactions, stating:

"For U.S. public companies, private investment in public equity (PIPE) transactions have become a well-accepted alternative to raising capital in the public markets. In a typical PIPE, a public company sells securities in a private placement to institutional investors and agrees to register the securities for resale by the investors in the public markets.

This allows the company to raise capital without the delays and costs associated with a public offering, while also providing investors with a ready means to exit their investment. Investors in PIPEs by U.S. public companies include hedge funds, institutional investors and, especially in recent years, private equity and venture capital funds that find PIPE transactions an attractive means of investing in growing companies with established revenue histories. U.S. PIPE transactions through July 2004 totalled $9.3 billion, on pace to eclipse the $12.7 billion raised in 2003, according to Placement Tracker."

How to Negotiate a VC Term Sheet

OnlyOnce, first time CEO, Matt Blumberg, who runs email services provider ReturnPath.net, offers this advice on negotiating a VC investment term sheet:

1. Get a good lawyer...
2. Focus on terms that matter, otherwise known as "pick your battles"...
2a (new). Sacrifice valuation for a clean security...
3. Always have a BATNA (Best Alternative to a Negotiated Agreement – a fancy way of saying Plan B)...
4. Be prepared to pay up for high quality investors...
5. Ask for references...
6. Don’t let the VC get away with negotiating a point by saying “we always do it this way.”...
7. If you have multiple investors in the syndicate, insist on a single investor counsel and a lead investor...
8. Try to deal in advance with follow-on financings...
9. Handle the term sheet negotiation carefully...
10. Finally, don’t forget to say thank you at the end of the process...

The full article is well worth reading here.

IP in M&A

Adam Liberman identifies 10 intellectual property Ingredients to a Successful Deal. (published by Mondaq, free subscription required)
Among the key points:

1. The greater the disparity between the proposed price and the value of net tangible assets, the more likely intellectual property is important to the transaction.

2. A working assumption is that foreign laws will be substantively different from domestic laws and must be dealt with accordingly.

3. A clear identification must be made of what comprises the intellectual property to ensure its proper valuation, accounting, taxation and transfer.

4. The deal is not complete until title transfer is recorded.

What's in a "Non" Agreement

In this article, published in the Pittsburgh Technology Council's, TEQ Magazine, I explain some of the legal considerations involved in signing employment contracts, nondisclosure, noncompetition and other "non" agreements.

1. What are "non” agreements?

Executives, IT professionals, consultants and others are frequently asked to sign non-disclosure, non-compete, non-raiding and non-solicitation agreements. These “non” agreements contain provisions called “restrictive covenants” that impose obligations on employees that may survive the employment relationship. “Non” agreements help an employer to keep trade secrets and other confidential information out of the hands of competitors.

The typical non-disclosure agreement restricts the use and disclosure of items such as customer lists, software, formulas, cost and pricing data and similar information. The other “non” agreements may require the employee, during employment and for a set period thereafter, not to compete with the employer, not to solicit the employer’s customers nor hire its employees away from their current positions.


2. What is an Assignment of Inventions Agreement?

In the technology arena, particularly where a company may contemplate going public, it is essential to have clear documentation regarding the ownership of software and other intellectual property. Accordingly, when an employee or consultant develops software or creates other work product that can be protected by copyright or patent law, the employer may require that the developer sign an assignment agreement that confirms that the employer and not the developer owns the work product. This is because the general rule in this area is that the person who creates the work owns it, unless, in the case of employees, it is clear that an employee was hired specifically to create the work.

3. What is an employment contract?

In most states, including Pennsylvania, employment is “at will.” In the absence of a contract, either the employee or the employer may terminate the relationship at any time, with or without cause, as long as the reason for termination is not illegal under a federal of state statute. Because employment terminations frequently bring lawsuits, employers may require employees to sign an offer letter or a more formal employment contract that clearly sets forth the terms and conditions of employment, such as duties, salaries, bonuses, fringe benefits and length of employment.

If separate “non” agreements are not used, the employment agreement may contain similar restrictive covenants and spell out the ownership rights of the parties to the employee’s work product. The employment contract may confirm that employment is “at will” or may contain provisions that require the employer to have good cause to fire an employee. The agreement may also call for severance payments to be made to the employee after contract termination. Usually, severance payments are tied to the employee’s continued compliance with any applicable restrictive covenants.

4. What is a Stock Option Agreement?

A stock option entitles its holder to purchase a number of shares of a company’s stock for a set period of time at a certain price, called the exercise price. Options are ordinarily subject to a vesting schedule that requires a minimum period of employment before the option may be exercised.

Options are usually evidenced by a written stock option agreement that is signed by the company and the option holder. The agreement sets forth the number of shares that may be purchased, the exercise price, vesting schedule and other essential terms. Frequently, the agreement will provide for acceleration of the vesting schedule or termination of the option in the event of a merger or upon employment termination. Employers also use option agreements to sign employees up to “non” agreements and to confirm the ownership of intellectual property.

5. What happens if I leave my current employer?

Planning is the key to successfully switching jobs, starting your own company or changing careers. Careful review is required of any agreements that you have signed. In consultation with legal counsel, you should determine your rights under the agreements, for example, with respect to any options. You also need to determine whether you are bound by restrictive covenants that could hinder you from pursuing your goals. Ideally, at the time of your hiring, you would have been aware of the possibility of future career shifts and in a position to negotiate favorable terms in the agreements that you signed.

Special care is required if you plan to engage in activities in competition with your former employer. Although non-compete covenants are legally enforceable, a number of factors will influence a court in deciding the extent to which a particular covenant will be enforced. If a covenant is not reasonable in scope or duration or imposes an undue burden on your ability to make a living, you may have more flexibility to pursue your objectives than it would at first appear.

Non-disclosure, non-solicitation and assignment of invention obligations are more readily enforced. In addition, regardless of whether you have signed any agreements, you may have a continuing duty to maintain the confidence of a former employer’s trade secrets and to refrain from interfering with your former employer’s business. It is therefore always best not to solicit customers of your current employer while you are still employed. Most importantly, It is imperative that you not take with you, transmit or disclose any trade secrets or other confidential information that belongs to your employer.

Legal Issues in Global Outsourcing

Jolly industries reports in a press release that the theft of its intellectual property and its problems dealing with the Indian legal system exposes the risks of global IT outsourcing.

These are but two of the many legal issues and pitfalls attendant upon global IT outsourcing as pointed out in articles by Jason Epstein and Wendy Fink

As Mr. Epstein states: "Companies looking to save money, gain technology expertise, or simply shift liability have increasingly turned to outsourcing. Outsourcing takes many forms, ranging from outsourcing a discrete business function, such as software development or records management, to the entire IT department. Whatever the form, there are certain common legal issues associated with technology outsourcing."

The key issues may be grouped as follows:

Intellectual Property -- ownership, licensing, confidentiality, control, protection

Process Management -- description and scope of services, performance specifications, control, quality, change orders, transfer of assets, transfer of personnel, dispute resolution, security, disaster recovery, termination rights and duties

Other -- privacy, liability limits, warranties, remedies for breach, exclusivity, enforcement, particularly as the foregoing relate to foreign jurisdictions

How to Buy a Business in 10 [not so] Easy Steps

1. ASSEMBLE A TEAM. Before undertaking to acquire a business in a privately negotiated transaction, it is often prudent to assemble a team of experienced advisers familiar with the process by which businesses are bought and sold. Team members ordinarily would include an accountant, tax adviser and attorney. Others could include a business valuation expert, environmental consultant and other professionals with particular expertise.

2. DETERMINE THE TYPE OF BUSINESS TO BUY. First, decide the general category of business. For example, service, manufacturing, wholesale, retail. Then consider the specific type of business, such as software developer, flower shop owner, widget maker. Decide on the size of the business in terms of sales, profits, and the number of employees. Decide whether to seek a business that is profitable and stable or one that is losing money and in need of new management. The more profitable and stable a business, the more it is likely to cost. If you are interested in a business that has a product or service that is outside your area of expertise, you should make certain that key employees will stay on after the change in ownership or that similar expertise can be hired.

3. FIND A BUSINESS FOR SALE. Possible sources include business owners, business brokers, investment bankers, print advertising, trade sources and your attorney, accountant and others among your network of contacts. Do not overlook any possibility in conducting your search. Business owners are often the best sources of industry information and may be willing to give free advice. Trade sources can be a viable source of information on businesses for sale. Key people within an industry, including suppliers, often know when businesses come up for sale or which owners might be willing to sell if the right offer were presented.

4. INVESTIGATE THE BUSINESS. A due diligence investigation of a business ordinarily proceeds in stages. Preliminary investigation may be conducted prior to making an offer or signing a letter of intent. More complete investigation is undertaken prior to the closing. The major areas to be investigated include the items contained in the Seller’s financial statements; the status of pending or threatened litigation; business relationships with suppliers and customers; tax matters; the competitive situation; employee relations and benefits plan matters; status of trademarks, patents, copyrights, trade secrets and other intellectual property; corporate, government and regulatory compliance; warranty and product liability issues; and potential environmental liabilities.

5. VALUE THE BUSINESS. Rules of thumb and valuation formulas are a starting point in determining the value of a business. The most useful of these may be the discounted cash flow method which is used to calculate the net present value of the future cash flows of a business based on certain assumptions. The valuation, however, must take into account various other factors, including an analysis of the results of the preliminary due diligence investigation. Remember that valuation is not the same thing as the price that is paid for a business. For many reasons, such as the relative bargaining positions of the parties and the skills of their negotiators, businesses are often purchased for more or less than their valuations. Nonetheless, having an accurate picture of the value of a business is essential in determining whether and how to proceed.

6. MAKE AN OFFER. This is ordinarily done by presenting the Seller with a letter of intent that serves to outline the agreement of the parties on fundamental issues and commits the parties to an exclusive period of negotiations. In order to make an offer, the buyer must determine the price and terms under which the buyer would be willing to make the purchase. Price is the central bargaining issue in the transaction, but price cannot be understood without thinking about terms. Terms are often more important than price. It makes a big difference, for instance if a $10 million dollar offer is for stock or assets. The tax consequences for buyer and seller are significantly different depending on the choice. Better for the buyer because of a step up in basis, and worse for the Seller because of double taxation. Similar considerations apply to liability issues – asset deals leave the seller exposed to liabilities that are not assumed by the buyer --and to the timing and type of payments made. Installment payments are worth less than the same amount paid at closing. Payment in stock of the buyer brings its own set of valuation issues.

7. NEGOTIATE DEFINITIVE DOCUMENTATION. The Purchase and Sale Agreement can be a complex document. The major bargaining issues include: price; structure; seller’s representations and warranties; the conduct of the parties pending the closing; and conditions to the closing. In a sense, the entire negotiation process involves the apportionment of liabilities between buyer and seller. This process often is crystallized in a hotly contested negotiation of the agreement’s indemnity provisions. The parties must agree on who is to bear the risk of post-closing liabilities, both those that have been disclosed and those which are contingent or unknown. The seller wants to sleep at night. The buyer counters that the buyer is paying good money for a business that exists as the Seller has described. The buyer wants protection if the business turns out not to be as advertised. Resolution usually involves agreement on time limits for making claims and limits on the seller’s exposure for certain types of liabilities.

8. ARRANGE FINANCING. The buyer's sources of financing depend in part on the size of the business being purchased. The larger the business being acquired the more sources that are available. Not only does the willingness of a particular lender to participate in the transaction increase, the number of potential lenders increases as well. Banks, insurance companies, commercial finance companies and venture capital companies all may be interested in providing financing for a larger acquisition. Many smaller businesses are purchased with a significant portion of the purchase price financed by the seller. The buyer, however, usually is required to make a down payment and ensure that adequate working capital sources are available. If the funds needed for the down payment are not readily available, the buyer must look for financing from an outside source.

9. SATISFY CLOSING CONDITIONS. In addition to the buyer obtaining financing, there may be several other conditions to be met before the purchase is closed. Typical closing conditions include: satisfaction with the results of the due diligence investigation; receiving required opinions, approvals and consents; entry into ancillary contracts; and the absence of certain events such as threatening litigation. Typically, buyer and seller cooperate to satisfy the closing conditions in advance of an agreed upon closing date.

10. CLOSE THE TRANSACTION. When the closing date arrives, and all of the conditions to the closing have been met, save those that will be satisfied at the closing, the parties and their representatives ordinarily assemble and lay out the paperwork. In neat piles on tables are found bills of sale, required consents, officer’s certificates, opinions of counsel, and other transfer memorabilia. After dealing with the inevitable last minute snafus, documents are signed, wire transfers are completed and the business changes hands.

The Deal of a Lifetime

LEGAL ASPECTS OF BUYING OR SELLING A BUSINESS

By: Anthony Cerminaro

The purchase of a residence may be the single largest transaction in which most individuals will ever be involved. For an entrepreneur or small business owner a similar statement can be made about the buying or selling of a business. In short, it is often the deal of a lifetime.

Legal considerations affect even the most basic aspects of such a transaction. For example, the risk of assuming unwanted environmental or employee benefits liabilities may rule out a particular structure for a transaction or prevent the transaction from going forward at all. Consultations between client and counsel at an early planning stage are essential to (1) close the deal in a timely manner, (2) ensure a smooth post-closing transition, (3) avoid surprises about the value of the business, and (4) avoid the assumption of unwanted or unknown liabilities.

This Article briefly summarizes some of the major legal considerations involved in the buying or selling of a business. While the article focuses on corporate transactions and is oriented to the buyer's viewpoint, similar considerations apply to the seller and other types of acquisitions.

STRUCTURE

Several alternatives are available for the structuring of an acquisition. Among these are (1) statutory merger or consolidation, (2) asset purchase and (3) stock purchase.

In a merger or consolidation, two corporations are combined. In a merger, the stock of one is exchanged for the stock of the other, cash or other consideration. In a consolidation, the stock of both is exchanged for the stock of a third corporation, cash or other consideration. The surviving corporation carries on the business of the combined corporations and either or both of the original corporations ceases to exist.

There are certain advantages to a merger or consolidation. The acquisition can be structured as a tax-deferred transaction. In addition, there are no minority shareholders after the merger or consolidation. There are generally no sales tax or bulk sale problems. In relative terms, the documentation of a merger or consolidation can be simpler than that used to document other types of transactions.

Disadvantages include acquisition by the buyer of all liabilities of the target, whether fixed, contingent, disclosed or undisclosed. While this problem can be obviated somewhat by obtaining warranties, representations and indemnities from the target company and its major shareholders, warranties and representations made by the acquired company ordinarily do not survive the merger. In addition, target stockholders may have dissenters rights enabling them to receive cash for their stock at an appraised value set ultimately by a court.

In an asset purchase, an acquiror may purchase all, substantially all, or selected assets of the target in return for any combination of stock, cash, debt or property. The advantages of an asset acquisition include the ability to purchase selected assets free of liabilities not specifically assumed. As with a merger, after consummation of the transaction, there are no minority stockholders of the target with which to contend. Ordinarily, shareholders of the target do not have dissenters’ rights.

There are also disadvantages to an asset purchase. Identification of the assets to be acquired is of paramount importance. Consummation may also require obtaining consents to assignment of contracts and prepayment of debt. Deeds for real property transfers and other separate transfer documentation may be required for each asset, class of assets, license and permit to be acquired. More complex documentation and more time is therefor ordinarily required to conclude an asset purchase. Real estate transfer and sales taxes may also be incurred.

In a stock purchase, an acquiror may purchase all, substantially all or majority of the target's stock. Advantages include the preservation of the target's identity, franchises, licenses and permits. In general there are no transfer tax, sales tax or bulk sales problems. The contract rights of the acquired business are ordinarily not impaired. Less documentation may be required. Disadvantages include the fact that the transaction may leave minority shareholders in the target. All target liabilities are also acquired.

Variations and combinations of the foregoing are also possible, including the use of earn-out arrangements. In an earn-out, a formula based on the future perfor¬mance of the acquired business is used which results in additional purchase price payments. Problems with earn-outs abound, particularly as to the creation of the formula, measurement methods and verification. Invariably, if the maximum earn out is not achieved, disputes will result.

TAX CONSIDERATIONS

Sale of business transactions may be structured so as to defer the recognition of federal income tax. Analogous provisions generally apply to defer state income taxes. All such structures require the issuance of stock of the acquiror or its parent and that either the target's historic business be continued or a significant portion of its assets remain engaged in a new business.

In a tax-deferred transaction, the recognition of gain for the target and its stockholders is deferred. In such a transaction, the acquirer obtains a carryover basis in the stock or assets of the target and the tax attributes of the target are carried over to the acquirer. In a tax-deferred transaction, recapture of depreciation and invest¬ment tax credit, problems which can arise in a taxable transaction, are avoided.

Structures which require the recognition of taxable income and gain upon consummation of the transaction include a merger or consolidation where cash or debt securities are paid. In addition, a purchase of stock or assets for cash, debt securities, or a combination generally would be a taxable transaction, as would an installment sale of a business. Regardless of structure, the acquisition of a corporation with net operating losses, investment credit carry forwards or other carry forwards presents special problems which must be dealt with on a case by case basis.

FINANCING

A question frequently asked by a potential buyer of a business is, "Where will I get the money?" Sources of capital for payment of the purchase price range from self-generation from internal operations, to family and friends, to venture capitalists to banks, vendors, suppliers, employees and even the seller. If bank borrowing is involved, assets, such as real property, plant, equipment, inventory and accounts receivable usually serve as collateral. The interrelationships and priorities among financing sources can be intricate and require time-consuming negotiations and careful drafting to avoid later problems. For instance, fraudulent conveyance issues must be addressed when using the target's assets as collateral in a so-called leveraged buyout.

In addition, in many financing transactions, federal and state securities laws must be dealt with. In this area, ignorance of the law can be very painful to a business enterprise and its principals. All sales of securities are regulated under both federal and state securities laws. The term "security" for purposes of these laws is interpreted very broadly, and includes stock options, warrants and some forms of debt, along with common and preferred stock and convertible debt. The securities laws prohibit misrepresentations (whether by misstatement or omission) in connection with the purchase or sale of any security. The securities laws also require certain written disclosures about the financial and business status, prospects and management of the busi¬ness, the securities being sold, how the money raised in the offering will be used, the risks associated with the investment, and any other material facts that an investor should know before making an investment decision.

Misrepresentations or omissions of material facts in connection with the purchase or sale of a security may sub¬ject corporate officers and management personnel to personal liability for investor losses. Personal liability may extend to the outside directors, and to others who are involved in promoting the purchase or sale of the security. Misrepresentations may be intentional or only negligent, and may include incomplete statements as well as failure to disclosure important information.

DUE DILIGENCE INVESTIGATION

The objective of the due diligence examination is to evaluate the target's business. The examination should expose potential problems so that specific agreements can be reached to deal with them. Areas of particular concern include environmental, product liability, employee benefits, and other potential sources of contingent liabilities. A thorough due diligence investigation will also evaluate technology, proprietary rights, accounting systems and other aspects of the target's business and identify legal and contractu¬al impediments to completion of the proposed acquisition.

OTHER CONSIDERATIONS

Other considerations which often are critical in structuring or documenting the purchase or sale of a business include those regarding (1) environmental matters, (2) pension and other employee benefit plans, (3) intellectual property, (4) product liability matters, (5) state corpo¬rate law considerations, (6) federal and state antitrust laws, (7) regulation of foreign investment or ownership, and (8) industry regulation.

Perhaps no area holds as many traps for the unwary as potential environmental liability. Federal and state laws impose liability for clean-up of hazardous substances on present owners and operators of real property from which there has been a release of any hazardous substances. The continuation, knowingly or unknowingly, of a prior practice may give rise to liability, as may a release arising from past activities which occurs or continues at a site. Past violations of clean air and water acts and other regulations governing emissions, discharges and permits may also become the respon¬sibility of the new owner. Fines may be imposed, operations forced to shut down and expensive pollution control equipment required. The purchase transaction may also trigger reporting obligations which must be complied with in order to avoid later problems.

Both to take advantage of what is termed the "innocent purchaser" defense to an environmental claim, and to learn more about potential liability exposure, environmental audits are strongly advised in all transactions involving the transfer of real estate or the lease of industrial property. Typically, these are done in phases. In a "Phase I" study, employees are interviewed, records reviewed and the site inspected. Based on the results of the Phase I study, a "Phase II" study involving testing and ground water and soil sampling may be required. Appropri¬ate representations, warranties and in¬demnification of the buyer by the seller in the acquisition agreement (and occasionally, walking away from the deal) are essential to protect against unwanted liabilities.

As to pensions and other employee benefit plans, the acquirer may become liable for excess taxes or become subject to a lien on both its and the target's assets if the target's plans have not met minimum funding or other require¬ments of the Employee Retirement Income Security Act (ERISA). If the acquirer wishes to assume, freeze or terminate the target's plans, specific steps must be taken to ensure compliance with ERISA. Multi-employer pension plans, employee stock ownership plans (ESOPs), profit sharing and other plans holding employer securities, and other stock plans for employees, present special problems which must be addressed on a case by case basis.

Intellectual property concerns revolve around the treatment in the acquisition of such items as patents, trade¬marks, service marks, copyrights and trade secrets. In general such items are transferable. Alternatively, ownership of intellectual property can be retained by the seller and use rights licensed to the buyer in exchange for the payment of royalties. Clear identification of the target's intellectual property must be made and the adequacy of the steps the target has taken to protect its rights must be determined. To the extent the target has not taken proper protective actions, curative measures must be undertaken to ensure that good title is transferred to the buyer.

With respect to potential product liability problems, liability for injuries and damages caused by products distributed by the target company will be assumed upon the merger or acquisition of stock of the target company. A carefully drafted purchase contract may limit the liabili¬ties assumed in this area. Note, however, that particularly where the target's business is continued in much the same manner by the acquiror after the pur¬chase or where there is an overlap or commonality of ownership before and after the transaction, successor liability is possible regardless of contract protections.

Regarding state corporate law considerations, directors of both the target and the purchaser must be cogni¬zant of their fiduciary duties to shareholders and, in certain cases involving compa¬nies that are insolvent, potentially to the creditors of the insolvent company. While directors may take advantage of the business judgment rule and statutory protection which insulates them from liability for actions taken in good faith, after due deliberation and believed to be in the best interest of the company, special situations may require that specif¬ic steps be taken. For instance, where transfer of control of the target is contemplated, elimination of a minority own¬ership interests is an important consideration, or in other contentious situations, it may be advisable to obtain fairness opinions from an investment banking or other like firm prior to approval of a transaction.

Depending on the size of the acquisition, the involved industries and the concentration of competition within the involved markets, federal and state antitrust laws may be implicated in the sale of a business. For instance, both the Clayton Act and the Sherman Antitrust Act prohibit certain business combinations which lessen competition. In addition, prior to concluding certain deals, the parties must file what is known as a Hart-Scott-Rodino premerger notification and observe a statutory waiting period. During the waiting period, the government may object to the transaction. Obviously any governmental interference should be anticipated and appropriately dealt with in documenting and implementing the proposed transaction.

Another area of potential concern, is regulation of foreign investment or ownership of United States companies and real estate. For instance a filing with the Committee on Foreign Investment in the United States (CFIUS) and a waiting period may be required if a transaction involves a non-U.S. acquiror. Filings and approvals under other federal laws may also be required, particularly where the business of the target is defense related or involves cer¬tain key sectors, such as maritime, aviation, mining, energy, real estate, commu¬nications, banking, government contracting or financial services.

Similar considerations may apply regardless of foreign involvement, if the proposed acquisition involves regulated industries. These include electric, gas and other utilities, insurance companies, banks or bank holding companies, savings and loan associations, airlines and other transportation carriers or television, radio and other communications properties.

SUMMARY

Legal considerations permeate all aspects of the purchase or sale of a business. Because of the complexities involved, early consultation with counsel is advisable to ensure that the deal of a lifetime does not become a lost opportunity.