Mergers & Acquisitions

The Federal marketplace remains a unique environment. Success in this environment still depends on an acute appreciation of both opportunities and the risks. This knowledge is especially crucial during the acquisition and sale of businesses performing Government contracts. Our lawyers have provided essential information in such transactions to assist clients in properly valuing acquisitions and in accurately assessing the potential for future profits.

We have served as general and special counsel in numerous acquisitions. Our attorneys are experienced in all aspects of due diligence including Government contract compliance audits, the legal aspects of financial audits, and program reviews. We have advised clients on the structuring of acquisitions to minimize future risk and to preserve critical assets. As drafters, we have helped clients to negotiate terms of sale and overcome obstacles to settlement. Where necessary, we have facilitated transactions by crafting innovative arrangements, involving indemnities, warranties and releases, for transferring liabilities to appropriate parties and the Government.

We are also knowledgeable about the novation process, and have assisted several clients obtain approval for the transfer of Federal contracts as part of an asset acquisition.  In addition, we have helped set up appropriate structures when a foreign entity acquires a contractor with classified contracts.

Petrillo & Powell, P.L.L.C. attorneys understand the business and financial needs of Government contractors. Our knowledge and prior experience allows us to add significant value to the transaction by creatively managing risk and resolving uncertainties faced by our clients. For example:

  • In performing routine due diligence for the acquiring party we identified and isolated significant areas of risk posed by the target company’s contract administration, subcontracting and property management systems. We also uncovered a serious threat to the future competitiveness of the business due to the involvement of certain key personnel in the operations of a subcontractor. As a result, the purchaser was able to justify a decrease in the acquisition price and successfully negotiated a strong no-compete provision to help preserve market share.
  • As part of the acquisition of a DoD contractor, an attorney of Petrillo & Powell, P.L.L.C., representing the seller, managed an on-site team of technical and accounting experts in evaluating and negotiating a $1 million claim against the Navy. The value of this claim was an important factor in establishing the eventual purchase price for the business.
  • As counsel to a major East Coast healthcare company, we successfully negotiated an agreement to purchase the assets of a subcontractor. We were able to structure an agreement which resolved the outstanding disputes between the parties over payments due the subcontractor while allowing the acquirer to preserve related claims against the Government
  • We helped prepare a client for acquisition by a major defense contractor, assisting by putting in place appropriate compliance structures and helping the acquiring party understand the unique aspects of the company’s business.