Mergers & Acquisitions
Lenders and Equipment Leasing companies frequently grow by acquiring portfolios of other lenders and leasing companies. The loans or leases are receivables and cast a stream of payments. The portfolios they acquire are purchased for a sum discounted to the present value of each receivable and therefore provide for a stream of payments as income and depreciation in the case of the equipment or other assets securing the receivables.
Services for Business Mergers & Acquisitions
Anthony Lamm has earned experience with business mergers and acquisitions while working with equipment leasing companies. Lamm Law, PC constantly evolves according to our clients’ best interests. As such, we have adapted to facilitate mergers and acquisitions with an emphasis on the equipment leasing industry.
Successful lenders and equipment leasing companies often expand by acquiring portfolios from other lenders and leasing companies. The loans and leases within these portfolios are categorized as receivables that generate a stream of payments. Strategic acquisitions involve the purchase of portfolios for discounted sums that reflect the present value of each receivable contained.
After acquiring a portfolio, the purchaser earns income through future payments on the receivables. The acquirer also gains creditors’ rights to any equipment and other secured assets attached to the portfolio. Portfolio acquisitions provide even further opportunity for portfolio managers to breed value long after a merger occurs. For example, companies that make strategic use of depreciation rates can take advantage of deductions on their taxable income.
Strategic depreciation methods are especially relevant in the business operations of equipment leasing companies. When a company purchases a portfolio containing receivables secured by equipment assets, the acquirer can claim depreciation expenses for these assets. These expenses, based on the difference between the equipment’s original cost and current market value, are listed on companies’ income statements. Finally, acquirers can add the value of depreciable assets into the cumulative depreciation of all fixed assets on their balance sheets.
Equipment leasing companies represent a large portion of Lamm Law, PC’s loyal client base. Over recent years, several of our clients have come to Lamm for assistance in seeking acquirers. Our network spans across several industries that depend on equipment leasing. These connections place Lamm in a position to facilitate discreet mergers.
Lamm has always been an eager advocate for small leasing companies. He sees this as a natural part of Lamm Law, PC’s close client relationships. This is an exemplary demonstration of our dedication to fulfilling clients needs. Lamm frequently introduces small leasing companies with other lenders who have interest in acquiring portfolios with attractive receivables.
After making these introductions, Lamm Law, PC ensures success in two stages that follow.
1. Lamm Law, PC drafts all legal documents involved in purchasing portfolios or merging companies. Lamm is known for structuring purchase agreements that include a servicing agreement. These provisions state that the seller will service the portfolio. This means they continue to collect the receivables (payments) for the acquirer of the account(s).
Lamm also conducts any negotiations related to mergers and acquisitions on our clients’ behalf. Our team has experience representing both the acquirer and seller in these matters. Our trusted legal representation reassures clients that they are in good hands from either position.
2. Our team conducts due diligence before finalizing any mergers or acquisitions. Lamm Law, PC stresses the importance of thorough research from either perspective, but especially for the acquirer. Our due diligence is used to determine if the portfolio purchase will produce positive results for our client.
Lamm Law, PC boasts the success of introductions we made, that resulted in mergers and acquisitions we went on to facilitate. More often than not, these agreements go beyond the expectations of both parties. The acquirer expands their business with additional assets and receivables, while the seller receives a sizable cash out.