Think Like an Owner

Launch Series Ep.5: Legal Diligence and Structuring with Scott Alderman and Alex Temel - Ep.187

Sep 5, 2023

Scott Alderman, partner at Trilogy Search Partners, and Alex Temel, partner at law firm Sidney Austin, discuss deal structuring and legal diligence in a search acquisition. They cover key steps in the legal process, risk mitigation, working with sellers, staging, reps and warranties, and advice for entrepreneurs working with legal counsel.

54:55

Episode guests

Scott Alderman

Alex Temel

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Quick takeaways

Identifying third-party consents, regulatory approvals, and structuring issues early on is crucial to avoid delays or deal breakers in the legal due diligence process of a search acquisition.

Tailoring the purchase agreement and due diligence requests to the specific nature of the business being acquired, while effectively managing family dynamics in deals involving multiple owners, are key considerations for successful acquisitions.

Deep dives

Overview of the podcast episode

In this episode, the hosts discuss the deal structuring and legal diligence process in a search acquisition. They are joined by Scott Alderman, partner at Trilogy, and Alex Temel, partner at Law Firm Sydney Austin. The conversation covers key steps in the legal process, timeline, risk mitigation, staging, reps, and warranties. The hosts highlight the importance of understanding the economic drivers of the business, engaging in regular and honest communication with advisors, and seeking investor support throughout the process. They also emphasize the need for tailoring the purchase agreement to the specific business and managing family dynamics in deals involving multiple owners. The episode concludes with advice for entrepreneurs on navigating the legal process and making informed decisions.

What aspects or terms in a purchase agreement often kill deals?

01:01

Running a Business is Harder than Closing a Deal

01:19

Introduction

4min

Legal Aspects of a Search Acquisition

29min

The Importance of Reps, Warranties, and Covenants in a Purchase Agreement

10min

Common Deal Killers in Purchase Agreements and the Importance of L.O.I Coverage

2min

Adjusting Process and Cadence based on Seller's Experience and Dealing with Family Dynamics

4min

Advice for Entrepreneurs Working with Attorneys

4min

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Ep.187: Alex (@aebridgeman) is joined by Scott Alderman (@Scott-Alderman) and Alex Temel (@AlexanderTemel).

Today’s episode is the fifth in our Launch Series, in partnership with Trilogy Search Partners and Pacific Lake Partners. This discussion focuses on the deal structuring and legal diligence process in a search acquisition, and I’m joined by Scott Alderman, partner at Trilogy, and Alex Temel, partner at law firm Sidley Austin, for the conversation.

During the episode we cover the key steps in the legal process, timeline, how to mitigate risk, working with sellers, staging, reps and warranties, and much more. We broke the conversation into the key stages of a deal and special considerations to make along the way and ended with advice for entrepreneurs when working with legal counsel.

Finally, if you haven’t already, be sure to listen to our four previous episodes on industry research, starting a search, the diligence process, and working with sellers.

Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.

Learn more about Alex and Think Like an Owner at https://tlaopodcast.com/

Links:

Scott on LinkedIn

Alex on LinkedIn

Sidley Austin LLP

Trilogy Search Partners

Pacific Lake Partners