Let the Buyer (and Seller) Beware

by Gary Gough, Partner; Ames & Gough, McLean, Va and Boston,

Serial Information: Civil Engineering—ASCE, 1996, Vol. 66, Issue 9, Pg. 68-69

Document Type: Feature article


A merger or acquisition shouldn't be a gamble, but many firms depend too much on good luck and good will. For long-term success, the best bet is a checklist for professional liability exposures prior to closing the transaction. The past 20 years have seen a number of high-profile mergers and acquisitions among entertainment, banking and pharmaceutical firms, and A/E firms are certainly not immune to this type of activity. The recently announced acquisitions of Greiner, Irving, Tex., by URS, Paramus, N.J.; Earth Tech, Long Beach, Calif. and Whitman & Howard, Wellesley, Mass. by Tyco International, Exeter, N.H.; and BRW, Minneapolis, by Dames & Moore, Los Angeles, attest to the viability of mergers and acquisitions as a method to either expand a business or to gain an initial entree into the consulting A/E profession. This manner of obtaining valuable assets, however, comes with significant financial risk and technical complications. All too often the buyers have unrealistic expectations as to the benefits of the transaction and rush to complete the deal without critically weighing the potential disadvantages. In most cases, the buyers wind up paying for the perceived goodwill of the selling shareholders/partners who, subsequent to the transaction, are neither financially nor emotionally invested in seeing that the hoped for synergy develops and matures. Moreover, the contractually negotiated escrows, indemnity agreements, warranties and the like, can be of questionable value.

Subject Headings: Liability | Beaches | Mooring | Consulting services | Assets | Risk management | Wind engineering | Human factors | United States | Minnesota | Los Angeles | California

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