One of the best moments in an entrepreneur's working life is finding out someone wants his or her company more than they do. In other words, they're being bought. While doing a public offering gets better press, or at least used to, next best can be selling your company (assuming you don't want to continue running it in perpetuity).
The trouble is, mergers and acquisitions now come with a growing legal price tag. It has always involved a coterie of lawyers, bankers and other fee-taking service providers, but those were mostly part of the process of getting from offer to closed deal. The difference now is that an increasing percentage of acquisitions over $100m have a large and growing additional price tag -- lawsuits from law firms representing plaintiffs alleging that the seller didn't get the best possible price.
Why do it? Because it pays, of course. This can be highly profitable litigation, with cases getting settled out of court more than half the time, as the following figure shows. And that represents a big change from ten years ago, when more than half of cases were dismissed and only around a quarter settled.
This is a disturbing trend, representing a de facto entrepreneurship transaction tax, one that is hitting energy sector worst, but technology isn't far behind.
Lots more information can be found here.
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