Welcome back to the Dealmaking with Laura DiFrancesco Podcast! In this episode, Laura delves into the intricate legal aspects of buying and selling manufacturing businesses, discussing the complexities involved in these transactions, including the asset-heavy nature of manufacturing, the importance of intellectual property, environmental considerations, real estate and financing options, the significance of contracts and supply chain management, labor relations, customer relationships, and tax implications. The episode provides valuable insights for both buyers and sellers in the manufacturing sector.
What You’ll Learn
Legal Essentials of Manufacturing Transactions // Understand why manufacturing businesses are among the most complex and common types of acquisitions - and how their asset-heavy nature influences every legal and financial decision.
Working Capital & Inventory Negotiations // Learn why working capital plays a larger role in manufacturing deals, from inventory valuation and adjustments to pre- and post-closing reconciliations that can affect purchase price.
Environmental & Real Estate Considerations // Get insights on environmental due diligence (Phase I and Phase II assessments), relocation risks, and how lenders approach manufacturing real estate - including SBA 504 loan options and lease requirements.
Financing & Existing Debt Strategy // Discover how to navigate existing seller loans and equipment leases, and when it may be advantageous to retain older financing with favorable interest rates as part of deal economics.
Labor & Workforce Retention // Understand the importance of collective bargaining agreements, skilled labor retention, and how to structure offer letters or employment agreements that secure key employees post-closing.
Tax & Deal Structure Implications // Dive into how asset-heavy businesses impact tax allocation, step-up in basis, and how buyers and sellers can negotiate tax elections to align economic interests
Episode Highlights:
00:00 Intro
01:18 Introduction to Deal Making and Manufacturing Business
02:36 Complexities of Asset-Heavy Manufacturing Transactions
08:15 Intellectual Property and Environmental Considerations
09:37 Real Estate and Financing in Manufacturing Deals
12:49 Contracts, Supply Chain, and Labor Management
14:30 DSL Advertisement
15:28 Supply Chain & Vendor Relationships
19:26 Customer Relationships and Tax Considerations
22:14 Outro
Resources Mentioned
Entrepreneurship Through Acquisition: A Legal Guide to Buying a Small Business // https://lauradifrancesco.co/eta-landing-page
Share Your Review + Get the Free Pre-LOI Due Diligence Request List // Email etareview@lauradifrancesco.co
Dean Street Law // https://www.deanstreetlaw.com/ & deanstreetlaw.com/links
Schedule your complimentary consultation with Dean Street Law today!
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Credits
Host // Laura DiFrancesco
Executive Producer // Teagan Rowland