Mergers & Acquisitions

Regardless of the transaction size, M&A deals are rarely straightforward.

Gus Lu’s experience in facilitating asset and equity acquisitions, as well as in strategizing and implementing new business combinations allows him to effectively respond to the myriad of issues that will arise during an M&A deal’s lifecycle.

He has represented businesses of all sizes across various sectors and is ready to tackle complex matters with a collaborative approach.

M&A deals can become a sinkhole for billable hours, not only from the lawyers involved but also by the accountants, advisors and other consultants.

Gus Lu takes a practical business approach in handling M&A deal pinch points, having represented both buyers and targets, as well as private and publicly-traded companies on M&A transactions in the oil and gas, infrastructure, cannabis and tech sectors.

Serving as the primary legal counsel, Gus is an expert at quickly drafting and processing the definitive documents, coordinating business decision-makers and subject matter experts in negotiations, brainstorming solutions for contentious issues, and maintaining deal momentum.

With an asset sale, the buyer is purchasing tangible and/or intangible operating assets of a business, instead of acquiring a target’s equity. The extent to which the buyer acquires the liabilities associated with those assets, as well as the representations and warranties made by the target in respect of those assets, are often highly negotiated agreement clauses.

There are many established ways to apportion risk between buyer and target, with transaction trends tracked by large national and international firms by way of extensive deal points surveys. Even if market research is conducted, how deal terms are negotiated ultimately depends on each party’s leverage and risk appetite.

In an equity acquisition, the equity interests in the target company, whether its shares, partnership interests or membership interests, are transferred from the target’s equity holders to the buyer.

All assets and liabilities of the seller come with the deal, subject to any carve-outs and conditions set out in the definitive agreements. The consideration paid to a target’s equity holders can be cash, equity of the buyer, or a combination of both. An equity sale could either result in a target becoming a direct or indirect subsidiary of the buyer, or an amalgamation of buyer and target into a new legal entity.

Similar legal issues arise in both asset sales and equity sales agreements, although the variety of corporate structures that will emerge from equity-based M&A are driven by tax considerations, as well as ensuring layers of corporate liability shields.

• Ferus Group’s sale of U.S.-based cryogenic industrial gas business units to Praxair Inc. for $15 million
• General Electric – Energy & Minerals Group’s sale of a North Dakota compressed natural gas joint venture to a U.S. private equity firm for $7 million
• Reservoir Group’s $45 million acquisition of a private Canadian drilling company
• The take-over bid acquisition of FP Marangoni to 32 Degrees for $15 million
• The sale of operating assets of Projex Technologies Ltd. to Ausenco Ltd. for $15 million

Gusto Law takes a flexible and transparent approach to fees for guiding a company through an M&A transaction, offering the following arrangements:

• Hourly rates: hire as required.
• Flat-rate fee: know exactly what the work on a particular project will cost, based on discussions on the scope of the engagement.
• A fixed weekly or monthly rate: to cover a certain number of hours.

These rates compare favorably with similar legal offerings in the Calgary area and there are strictly no hidden costs to worry about.

At Gusto Law, you get the reliable legal support of a skilled and insightful business lawyer with experience in drafting and reviewing all types of business agreements.

If you would like to discuss your legal requirements, call (403) 604-1977 or contact Gus for a free 20-minute consultation.

This webpage’s content has been prepared to provide a general overview of certain legal services offered by Gusto Law, and is not intended to be an exhaustive legal analysis. It is not a substitute for legal advice and should not be relied upon for any particular transaction, proceeding or circumstance. The information is provided as of the date set out below, and thus the reader is cautioned that changes or developments in the law, or its interpretation, may have occurred since that time. If you are forming a new business, please seek further individual consultation with Gusto Law.