Minnesota Lawyer
Neophytes to the heady world of mergers and acquisitions, generally involving millions or billions of dollars, may be surprised to find that it is a relationship business after all, much like most of the practice of law.
Michael Stanchfield, of Faegre Drinker, noted that discussion of the relationships or “people’s psychology,” was a continuous thread through Faegre Drinker’s 2022 M&A conference in October, which he co-chaired, along with Kate Sherburne and Ryan Miske. It’s important to concluding successful deals, he said.
For example, he said, Stanchfield represented Hormel last year when it acquired Planter’s snack food lines from Kraft for $3.35 billion, the largest deal in Hormel’s history.
That’s a lot of cheese balls, but it went beyond money, he said.
Hormel has been innovating in product lines that are important to the employees, who feel like they are a part of something good, Stanchfield said.
Hormel recognized that a lot of value in the acquisition was the Kraft employees, who went to work at Hormel. That company has been good at bringing on new workforces, he said.
Stanchfield represents publicly held companies across the country in on transactions ranging from the middle market to many billions of dollars. He advises companies on mergers and acquisitions, tender offers, corporate governance, takeover preparedness, and general corporate counseling.
The M&A practice is tied to economic cycles and right now the market is unsettled, Stanchfield said. “It will be unsettled into the second half of next year, but we have a very large and diversified practice which we think will be successful,” he said.
For now, he said, clients are focused on building sustainable businesses. “They are concerned about uncertainty in Washington and uncertainty in the world. They are making these decisions in uncertain times,” he said. And it is a well-known adage that business hates uncertainty.
Also, Stanchfield continued, financing markets are disrupted, making sellers jumpy about financing and anxious about closing. “The cash buyer had a leg up,” Stanchfield said. “Those who don’t rely on public financing have leverage.”
