Broc Romanek in conversation with Louis Lehot on how to negotiate deals during the pandemic

Louis Lehot, business lawyer and partner at Foley & Lardner LLP in Silicon Valley, and formerly the founder of L2 Counsel, P.C.

Broc Romanek sat down with Louis Lehot, business lawyer and partner at Foley & Lardner LLP in Silicon Valley, and formerly the Founder of L2 Counsel and the video blog series — #askasiliconvalleylawyer — to discuss negotiating mergers and acquisition transactions during this pandemic.

Personal rapport, trust, and confidence are critical ingredients of successful mergers, acquisitions and investment transactions, and building these elements is key. For deals to get done, dealmakers need to inspire trust and confidence in one another and the working group. With quarantines in place and face-to-face meetings out of the question, following are answers to frequently asked questions on how to negotiate transactions in the new “normal” successfully.

Romanek: Will corporate development and business unit leaders on the buy-side be receptive to looking at potential acquisitions during the pendency of “shelter-in-place” orders?

Louis Lehot: The answer is an unequivocal “yes.” Despite the lack of physical proximity to targets, corporate development, and business unit leaders continue to be responsible to their stakeholders for growing their businesses, both organically and inorganically, and for stopping the bleeding that might otherwise occur. On many occasions, M&A transactions will be timely and opportune.

New corporate partnerships may take shape. New technologies and innovations may be created and adopted. Clearly, M&A deals have continued and will continue to be struck during and after the pandemic. Their character may change, however, as buyers look for businesses that can tap into the “new normal” environment.

Romanek: Besides the obvious challenges of not being able to meet in person, what are some of the difficulties in doing M&A deals remotely?

Louis Lehot: The challenges of doing deals remotely are numerous:

Romanek: What are some of the technologies and other tools to counter-act the challenges of remote deals?

Louis Lehot: Certainly, increased technology, communications, and collaboration tools are required to counter-act the challenges of doing deals remotely:

Romanek: What are some due diligence items that need special attention in light of the pandemic?

Louis Lehot: Here are a few:

Romanek: How can we build the trust and confidence to do a deal without meeting in person?

Louis Lehot: To build trust and personal rapport with clients and counterparties, M&A dealmakers typically spend a lot of time on the road, conducting face-to-face meetings, attending conferences and events, going out for meals, and watching or engaging in sports.

In the face of the “new normal” of working in solitude, dealmakers will need to work harder to build trust and confidence through their personal interactions over email, text, and calls, and increasingly use video calls to create the feeling of a personal experience.

During these interactions, dealmakers will need to make sure their words and deeds are:

Romanek: What are some tips for doing M&A deals that transcend the time and circumstances of the pandemic?

Louis Lehot: Consider these:

Romanek: What are some tips on negotiating M&A deals, particularly when doing so remotely?

Louis Lehot: Here are some tips:

The Internet can help give you obtain limited background history on a person but engaging a third-party background check firm to dig into a target and a target’s management team is particularly important to detect fraud.

Romanek: If not already begun, what are some things you can do to help boost your odds of success, now?

Louis Lehot: To effectively operate an M&A program, whether on the sellside or the buyside, there are steps you can take to be ready:

º The enabling of digital execution and storage of documents, contracts, and commercial arrangements. Socially distanced interactions where legally permissible.

º Instituting more video-calls to replace phone or face-to-face meetings, with care to do so securely.

º Being mindful about avoiding circumstances where confidences could be abused and fraud potentially introduced (ask more and more questions).

Romanek: To sum up, what are some evolving best practices for doing deals remotely?

Louis Lehot: In the post-COVID world, we must expect the unexpected, and as a result, we can try harder:

Examples abound of buyers and investors exhibiting courageous decisionmaking and striking the most lucrative deals in times of crisis. Even in light of coronavirus and social distancing, with a healthy dose of optimism, positivity, and creativity, deals can be identified, marketed, structured and financed intelligently, so that you can preserve valuation, sustain market momentum, and execute in a timely manner.

This article was originally published here.



Louis Lehot is a partner and business lawyer with Foley & Lardner LLP, based in the firm’s Silicon Valley office. Follow on Twitter @lehotlouis

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Louis Lehot

Louis Lehot is a partner and business lawyer with Foley & Lardner LLP, based in the firm’s Silicon Valley office. Follow on Twitter @lehotlouis