Lawyers and Accountant recommendations please!!

May 17, 2019

by a searcher from University of Pennsylvania - The Wharton School in San Francisco, CA, United States

Hi, we are on the verge of going under contract with a healthcare software company, but are concerned that the seller may get cold feet due to several comments he made in diligence. Can anyone point me to:

1) Lawyers who would do a PSA but waive fees in the instance of the seller walking away?
2) Accountants who would do a accounting study that dives into the ARR and revenue recognition of the business

(there is no EBITDA).

Thank you

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Reply by an investor
from University of Notre Dame in Pittsburgh, PA, USA

Most lawyers if you have a strong relationship will do #1 - in a perfect world you would have been building a relationship with them during your search and they would of helped with LOI but sounds like you are starting fresh. For healthcare focus I recommend Geoff Cckrell at McGuire Woods in Chicago but deal size plays into it. Honestly the bigger issue to me is you already think your seller is getting cold feet. Time is your most valuable resource so don't waste it - have the tough conversation now and educate and address his concerns - build breakup fee into your LOI if you can. Good luck

Reply by a professional
from University of Illinois at Chicago in Chicago, IL, USA

I agree with the post above. Better to spend the time up front to make sure you have a deal and a seller that is comfortable moving forward. The legal work can be staged to keep things efficient (e.g., the PSA isn't terribly time consuming, but legal due diligence can be). As to fee waivers, I work with searchers and will defer fees until closing and also provide broken deal fee waivers. The exact arrangement depends on the size of the deal and other variables. Feel free to PM me if you'd like to discuss further.

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