Reinhart Boerner Van Deuren, FACC Member article , "Middle Market M&A In The United States: Opportunities and Challenges"

For a complete PDF version of this article, please email faccmidwest@gmail.com

MIDDLE MARKET M&A IN THE UNITED STATES:

OPPORTUNITIES AND CHALLENGES

By Kevin J. Howley, shareholder and director of Reinhart Boerner Van Deuren s.c. (reinhartlaw.com)

and

Veli-Matti Tarvainen, LL.M., General Counsel of Yara Suomi Oy

M&A practitioners who have been through several business cycles should foresee the opportunity resulting from the current economic downturn. Although the credit crisis has curtailed the normal cycle of acquisitions and divestitures, time marches on. In the United States, private companies are often owned by entrepreneurs and their families, who face generational transitions and corresponding management and tax issues as the founders age, retire and/or pass on, or by private equity funds that have their own self-imposed limited time horizons.

Strategic European buyers with available acquisition capital will have access to an excess inventory of niche companies and market entry opportunities as the economy pulls out of the current cycle. In the decade before the current downturn, the percentage of acquisitions in the United States by foreign buyers increased substantially, driven, no doubt, by the still relatively weak dollar and attractive market access opportunities.

Professionals advising on or pursuing their own first-time entrées to the M&A market in the United States will benefit from knowing the differences and similarities of doing deals in the United States as compared with the European market generally. Though some may have concerns over the potential financial risks and legal pitfalls, as European buyers move through the process, they should find that many of the differences are "pro-buyer" and are intended to prevent the seller from shifting unknown legal risks to the buyer.

Please visit www.faccmidwest.com for links to the entire article, and to read more about the potential for M&A opportunities in the United States and some of the key issues that Finnish and other European buyers should consider in approaching U.S. transactions.

About the Authors:

Kevin J. Howley is a shareholder and director of Reinhart Boerner Van Deuren s.c., Milwaukee, Wisconsin, USA, Chairman of the Business Law Section of the State Bar of Wisconsin and a member of the American Bar Association's Mergers & Acquisitions Section. Mr. Howley has assisted clients in the acquisition, divestiture and operation of companies throughout the United States for over 25 years and has assisted numerous European clients seeking to establish or expand their presence in the United States through acquisitions, with a special emphasis on Finnish and Swedish clients.

Veli-Matti Tarvainen, LL.M. is the General Counsel of Yara Suomi Oy. He has extensive prior experience as General Counsel of quoted companies that continue to have sizeable industrial operations in the United States. He has also worked as the General Counsel for a consultancy firm, which was and remains the largest forestry consultant worldwide. Messrs. Howley and Tarvainen have collaborated on numerous acquisitions and divestitures in the United States and elsewhere over the past 20 years.