Legal Estimate for $4-5M EV deal in home healthcare (SBA)

October 14, 2021

by a searcher from Northwestern University - Kellogg School of Management in New York, NY, USA

Been getting varied estimates for legal fees I should expect in a small SBA deal (4-5M EV). Anyone have good data points on what I should expect to pay? PS - I have transaction docs from another deal in the same space so looking to do this cost efficiently and the company I am looking to acquire (LOI signed) is relatively clean. I am self funding it so obviously cost conscious. If there are attorneys here that have experience in the space and are self funded searcher friendly, comment or like and can reach out as well.

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Reply by a searcher
from Queens University in Edmonton, AB, Canada

I’m not a lawyer, but here is my feedback based on experience. Don’t try and use docs from another deal and in general don’t cut corners on legal. I’m not saying go to the most expensive firm as there is no guaranteeing the practitioner at an expensive is any better than someone at a smaller firm. Find someone with experience and business acumen especially if it’s your first transaction, they save you a ton of time and headaches navigating the negotiations on the purchase agreement and VTB.

Whatever you get quoted will almost certainly be lower than what the final bill winds up being. Potentially by a wide margin.

Not sure about the SBA program as I’m in Canada but some lenders here will finance a portion of your closing costs (fees on your banking facility, legal and other diligence fees). Might be worth asking your lender.

Hope it helps.

Reply by a professional
from The Johns Hopkins University in Basking Ridge, NJ 07920, USA

I am happy to have a discussion to provide thoughts on a range, but don't overlook the fact that deals in regulated industries generally have higher advisory/legal fees.

I am all for being practical and cost conscious, but not at the expense of the investment. If the EV is around ~$5M, then trying to save a relatively little amount of money be reusing docs that may not be appropriate is not recommended. Assuming you were involved in the prior deal, the benefit that you get from the prior deal is not the docs, but the experience with the process.

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