Many business owners speed towards a merger or acquisition without first contemplating the benefits of an initial joint venture among the parties.

Joint ventures are one of the most underutilized structures for helping a business grow and may provide access to market segments that otherwise might remain out of reach. A joint venture is simply a contractual arrangement that serves a specific purpose and may be just what is needed in the near term. Many opportunities arise from alliances with complementary, rather than competing entities. A joint venture can accomplish that.

One company may be great at producing products, but lack marketing savvy, while a great marketing firm might be looking to bring added value to its existing customer base. A joint venture would be a natural approach to bringing these complementary needs together for mutual benefit.

In comparison, mergers and acquisitions are often triggered by a desire to exit a business segment or by the need for a capital infusion to pursue opportunities. However, a merger or acquisition has permanent effects on the business and can be difficult and costly to unwind.

Because joint ventures are not an absolute necessity, they can be negotiated from a position of strength, truly striving for a mutually beneficial arrangement.

Many eventual mergers began as a “trial marriage” through joint venture agreements. More importantly, many companies have learned valuable insights through a joint venture that allowed them to avoid forever losing control of their business to a relationship that they would ultimately regret.

We invite you to contact our attorneys to learn more about how Kupfer. can put joint venture arrangements to work for you.

REPRESENTATIVE TRANSACTIONS

Supply Meets Demand

Structured a joint venture between a company that had the production capacity to refurbish cellular telephones and the company that was able to acquire and remarket used cellular telephones.

1 + 1 = 4

Coordinated a joint venture between a bakery and a food marketing company that increased production of the bakery and sales of the food marketer.