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Structuring Acquisitions of Family-Owned Businesses: Valuation, Due Diligence, Deal Structure, Operational Transition

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, July 12, 2023

Recorded event now available

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This CLE course will examine key legal considerations involved in structuring acquisitions of family-owned businesses. The panel will discuss strategies for addressing valuation, conducting due diligence, and evaluating whether to structure the deal as a stock purchase, asset purchase, or purchase of LLC units. The panel will also address transitioning business operations to the new owner and other vital issues.


Family-owned businesses, accounting for over 60 percent of jobs in the U.S., are a crucial target for both strategic and financial buyers. However, mergers and acquisitions of family-owned businesses are complicated for a variety of reasons, including valuation challenges, tax and estate planning considerations, internal governance, and potential issues concerning a generational transfer of the business. An acquisition can be a new and challenging undertaking for existing owners, and management may have an emotional attachment to the company.

Counsel representing buyers of family-owned businesses should carefully conduct due diligence to identify potential risks and liabilities and seek to mitigate those risks and liabilities or "price them into the deal." Counsel should also give management deal-side support so that it can continue to run the business and meet any projections during the sales process provided to potential buyers.

When structuring the sale of a family-owned business, counsel must evaluate whether a stock purchase or asset purchase is the most prudent option, considering tax and other financial impacts. Counsel can also advise how to structure any retained ownership (often required by financial buyers) in the business following the sale. Counsel must also develop a strategy for using earnouts, "seller paper," "rollover equity," or other methods to bridge valuation gaps or to provide needed cash to fund the purchase price.

Listen as our authoritative panel discusses best practices for managing valuation, due diligence, deal structure, tax, estate planning, and other challenges in acquisitions of family-owned businesses.



  1. Key legal, business, and tax considerations with the acquisition of a family-owned business
  2. Due diligence best practices
  3. Structuring the deal
  4. Valuation challenges and solutions


The panel will review these and other key issues:

  • What legal and business issues arise with the acquisition of family-owned businesses?
  • What are the key components of a comprehensive due diligence plan for both buyers and sellers?
  • What are the benefits, risks, and tax aspects of structuring the sale as a stock sale versus asset sale versus merger?
  • What valuation challenges do acquisitions of family-owned businesses present and how can they be overcome?
  • When and how should family members decide to "reinvest" in the family business with "rollover equity" when selling to a financial buyer and what are the tax impacts of doing so?
  • How to prepare in advance of a transaction to address the family's estate planning needs
  • What management and transition-related issues could arise when selling a family business?


Clingen, Kenneth
Kenneth W. Clingen

Clingen Callow & McLean

Mr. Clingen chairs the firm’s business counseling department. He is general counsel to a number of privately...  |  Read More

Ellis, Michael
Michael A. Ellis

Buckingham Doolittle & Burroughs

Mr. Ellis focuses his practice on mergers and acquisitions; corporate governance; public and private securities...  |  Read More

Krivosha, Terri
Terri Krivosha


Ms. Krivosha, business attorney and mediator, enjoys nothing more than helping shareholders, family business owners,...  |  Read More

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