Small-business M&A is not a smaller version of big M&A.
It is a different practice. The targets are owner-operated and underdocumented. The diligence finds gaps that have to be papered over before closing. The reps and warranties have to do real work because there is no insurance backstop. The earn-out and the working capital adjustment will matter more than the headline number. And the seller is often staying on, so the post-closing relationship has to be drafted as carefully as the purchase agreement.
Sterling & Hayes runs lower-middle market deals - typically $1M to $50M in enterprise value - with a partner-led team that has actually closed these transactions, not learned them from a Big Law form file.
What is included - sell-side
Exit readiness & cleanup
The 60-day legal cleanup that happens before the data room opens - IP assignments confirmed, missing minutes drafted, key contracts assignability reviewed, tax positions documented. Buyers will find everything; we want to find it first.
Data room & diligence response
A structured data room and a diligence response process that controls narrative and time. Buyers' lawyers will ask the same 200 questions on every deal - we answer them once and we answer them well.
LOI negotiation
The LOI is where the deal economics get cemented in. We negotiate purchase price structure, escrow, earn-out, working capital, exclusivity period, and key conditions before the seller loses leverage to the diligence process.
Definitive documents
Asset Purchase Agreement, Stock Purchase Agreement, Merger Agreement, ancillary documents (escrow, transition services, employment), disclosure schedules. Drafted to protect the seller without blowing up the deal.
What is included - buy-side
Diligence design & execution
Risk-prioritized diligence focused on the issues that will actually move price or kill the deal, coordinated with your accounting and financial diligence advisors. We deliver a written diligence report with prioritized issues.
Deal structure
Asset vs stock vs merger analysis based on tax, liability, contract assignability, and employment continuity. The wrong structure costs the buyer twice - in tax and in integration friction.
Financing coordination
Senior debt, SBA, seller notes, equity rollover - we coordinate with lenders and equity partners to keep the financing in step with the closing schedule.
Post-closing integration
Transition services, key-employee retention, customer/vendor consent rollout, system migration legal support, and the inevitable post-closing disputes (working capital, earn-out, indemnification claims).
Closed Deals, Not Stalled Deals
Asset deal vs stock deal vs merger - in plain English
In an asset deal, the buyer picks which assets and liabilities to take. The buyer typically prefers this because of liability limitation and a stepped-up tax basis; the seller typically dislikes it because of double-taxation in C-corp structures and asset-by-asset assignment friction. In a stock deal, the buyer takes the entire entity including all known and unknown liabilities. The seller typically prefers this for tax treatment and clean exit; the buyer relies on reps, warranties, and indemnification to handle hidden liability. A merger is a hybrid - the entity continues, but in a different form. The right structure depends on tax, liability profile, contract assignability, and who is staying involved post-closing.
Our process
- Structuring call. Before the LOI, we model the structure (asset, stock, merger), the tax implications, and the major deal points. You get the trade-offs in writing.
- LOI negotiation. We negotiate the LOI to lock in the items that matter and to preserve flexibility on the items that should not be locked too early.
- Diligence. Buy-side: structured diligence with prioritized issues. Sell-side: data room build and diligence response.
- Definitive documents. Purchase agreement and ancillary documents drafted and negotiated, with a closing checklist tracked weekly.
- Closing. Funds flow, escrow funding, document execution, and the formal closing memorandum.
- Post-closing. Integration support, working capital true-up, earn-out tracking, and indemnification claim management.
Why Sterling & Hayes
You get a partner-led M&A team that has closed deals across SaaS, services, professional firms, e-commerce, manufacturing, and distribution. We are not so small that the deal stalls when we get busy and not so big that you become a junior associate's first reps and warranties section. We coordinate with your accountants, financial advisors, and lenders so you have one quarterback running the legal side of the transaction.
