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Hi, I'm Regina Campbell, the managing attorney here at the Campbell law group.
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And I want to welcome everyone back for the seventh episode season one of the legal zone.
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Hopefully they've been really helpful and I hope you enjoy today's topic.
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Today's topic.
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We're going to talk about our cross border deals.
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and this is a particularly a timely issue to talk about, because just recently the United
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States opened up the borders more for international travel November 8th, and it's believed that
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it's going to create you know, bring back the business investors or bring back some
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of the sort of entrepreneurs and potential increase the deal and flow.
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So to speak of what's going on across the borders.
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But interestingly enough we do think it's going to have that effect, but interesting enough,
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it actually, the first quarter.
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2021, England.
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The third quarter has been a seller year for M and A transactions.
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Surprisingly cross border ones, specifically, according to Bloomberg, by the way specifically
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the United States is one of the top requires as usual UK.
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We have Canada also, Japan.
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So it definitely seems that cross border deals are far from being dead.
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And if anything, I think they're only going to increase now with the opening of some of
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the borders and the reduction of the pandemic is affect right now.
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And some of the countries are kind of loosening up.
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Of course, there are some countries that are experiencing more surges than others.
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This is anticipated, hopefully that it's going to be diminished as time goes on and each
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country starts to get more access to vaccines. which brings us to the overall importance
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of cross board deals and why they're happening.
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This pandemic has certainly caught me off guard.
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I would've thought we were heading towards a, you know, kind of a meltdown like in 2008,
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2009, but this pandemic really has been a re adaptation of new companies.
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Unfortunately, some have.
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You know, gone, gone under and, and not done well, others have thrived, but this has definitely
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been a, a tale of what companies can adapt and are innovative and the use of technology
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to adjust to the circumstances and the changing in the consumer markets, in addition to the
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consumer to commercial markets.
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So.
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With the opening, you know, November 8th of basically some international travelers, it
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is going to allow not just international travelers to come here, but of course, Americans are
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traveling more now that there is more vaccination and as more clarity in some of the rules and
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the different countries and so forth as far as vaccination and who can come in and not.
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I think also one of the other pressures that this country is going to see, and it's probably
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going to increase the need for cross border deals or potentially to, you know, to find
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synergies across the across the ocean.
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So to speak is going to be talent.
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Talent acquisition.
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As everyone knows, there's a great re resignation occurring in the United States right now.
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And it's leading towards of course, a shift in employees looking for the types of jobs,
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reskilling themselves, which overall I think in the long term is going to be Give the United
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States a boost and effectively increase our basically mobility employee, mobility, satisfaction,
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hopefully including pay.
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And some people don't like that idea, but as a business owner myself and a lot of business
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owners that I represent are kind of concerned with the trend.
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However, I think in general, that should be a good trend because it should create, you know,
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Obviously more opportunity and also more money for people to spend as well and a better standard
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of living, which leads to more political stability.
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But in general, I think some of the acquisition issues that we're having here with employment
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and in talent and so forth are going to be filled often by the voids that exist in other countries
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or countries that have more stable sort of workforce in particular industries.
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And.
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So that seems to be driving those type of synergies and obviously political stability,
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governmental regulation, how they've been handling.
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COVID what the outlook looks, not just short term, but long term is driving a lot of companies
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to look for sort of a subsidiaries and other companies that can compliment.
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Their global enterprise or potentially domestic sort of companies that are in the United States
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that they may have.
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They're finding that to be a better fit than trying to find local companies in the United
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States.
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So to speak.
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However, there is some consolidation of course, going on in the domestic sort of arena as
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well.
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For the most part, I not just find it, just, I find it doing more regional.
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I'm a small, I'm a smaller business attorney owner, not necessarily for the one of the
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big firms.
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So I'm not as familiar with maybe the larger scale deals.
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Of course you hear some of.
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You know, on TV and some of the antitrust issues that they raise.
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But in general, I see some regional consolidation sometimes due to distress companies being
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bought up by someone that may have done well, whether because they receive funds from COVID
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or they just had certain types of contracts that were structured in a manner that allowed
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them to survive through COVID better, but yet they want to.
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Grab the customer base, potentially technology of the equipment that another company has
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and they're being bought out, unfortunately, sometimes in our distress circumstances, but
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it seems to be the pattern sort of regionally and locally that occurs.
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the other thing to consider also with cross border deals is the availability of course
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of funds and money, and to be able to bring money outside the country or into a country.
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There's been some issues here, some upheaval in generals of political basis.
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What's going on in certain countries in south America, which has.
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Including even Columbia, which was always a, a very close sort of connection with, with
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Miami and Florida and the United States, it seemed to be having some upheaval also politically,
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which is kind of Dering some of the deals in Columbia and some of the south American
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countries.
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However, it is pushing some of the residents of Columbia and other countries to want to come.
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so once again, as we always know, political environment and stability is something that
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also drives potential deals and drives people into countries or out of countries.
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And this is no exception.
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This is also another thing to take into consideration is the, you know, access to
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capital again, and to funds in the United States.
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Once again, always seems to have a very friendly environment for that and sort of a credit
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richer capital rich type economy and companies seem to be sitting on a lot of cash.
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Particularly tech companies.
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So it's, once again, it's the synergy of maybe certain technologies working and surviving
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the COVID panic epi, you know you know, disaster, so to speak.
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They might find a smaller company.
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A tech company has a technology that they're no longer able to scale up or bring a.
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To the market on a larger scale.
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And the company comes in and says, Hey, you know what?
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I got this, you know, I think we come together, I'm going to buy you out and I'm going to bring
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your technology into compliment ours.
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And I think those have been the biggest winners.
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So in general, what I'm seeing, I am seeing and on a small level and a small scale in
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Miami is a Miami corporate attorney people interested in purchasing companies a lot of
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money to potentially expand and also look.
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Acquisitions in other states and sometimes other countries, but for the most part, it's
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been local, what I've been experiencing.
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So a couple of tips when you're looking at, you know, doing whether it's a cross-border
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deal or maybe even a local sort of cross-border state to state not international you know,
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once again, you need to look into maybe is it more important than before?
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What, how friendly that state or country's COVID laws.
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what kind of lockdowns or procedures they have in place?
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What is their health circumstances?
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What are their political, you know circumstances, are they stable?
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And unfortunately you know, many people around the world would actually be concerned for
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the first time about the United States.
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However, those concerns are still seem to be damper by the fact that this still seems
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to be the primary location to you know, for companies to go acquire other companies.
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And.
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This becomes the parent company, the remaining company.
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So that indicates some stability and practicality with, you know, keeping them United States
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company.
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So even though there's concerns about stability in the United States, there's also a concern.
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All you know, around the country is different countries.
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So one of the tools is you have to make sure that you understand the landscape and the
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local landscaping of that particular country.
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Not just the country itself, but actually the city and maybe local provinces before
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you get involved in any kind of cross you know, border deals, so to speak, whether it's
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mergers and acquisitions or potentially even transactions, which I haven't really discussed
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much today, but it's the same general concept.
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You want to understand what the environment is?
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Is your money going to be safe there?
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What kind of, you know, assets will remain in the country versus being expat, you know,
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expatriated or.
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Exported back to the United States, the structure of the deals with their stock or cash deals.
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Do these companies have large debts?
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Do they, are they also, when you figure out valuations, one of the major concerns that
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I've seen with companies is that we had some, had a dip, some had a significant dip that
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was unusual due to COVID and a lot of times they're running off.
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Credit lines for a certain period of time and they're catching up now, but it might
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skew the valuation of the company.
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So it's important to maybe extend deals long enough where you either have a look back period
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that sort of evens out or basically.
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Find sort of a baseline for the value of the company, depending after you're selling or
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purchasing, of course, a purchaser right now, if you did a valuation, some of these companies
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might be cheaper and have an interest in buying them at this time.
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If you are a seller, you may want to consider, again, drawing out that timeline and potential
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sort of valuation time period with your financials and your income and, and over time.
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And, and what happened during the pandemic to try to normalize it, to get maybe a better
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price for your.
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So these are some of the things that, you know, hopefully this has been helpful.
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It's really more pre cursory stuff we're talking about here.
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And I just thought it was so important right now because when everyone thinks, you know,
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the cross border deals are dead, they're really, really not as always, you know, human ingenuity
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and determination finds a way and all costs.
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So to speak you know, to continue to go forward and to create, hopefully what's best, you
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know, for everybody and overall create a better future something to consider again, you know,
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when we go forward, even as business owners you know, what that looks like and how you
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can partake in that.
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I want to thank everyone for joining us.
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Take care.