In the high-stakes environment of Florida’s M&A market, the gap between a signed Letter of Intent (LOI) and a successful closing is bridged by one thing, the definitive transaction agreement.
In Q3 2025 alone, Florida saw 157 M&A deals with a combined value of approximately $15.1 billion. While the average transaction size hovered around $96.2 million, the volume of activity in sectors like technology, healthcare, and real estate confirms that the market is aggressive.
At KEW Legal®, we believe that legal counsel should be a strategic asset that protects your financial future. This guide moves beyond surface-level definitions to explore the tactical negotiation of the agreements that will define your exit or acquisition.
Asset vs. Stock Purchase
The choice between an asset purchase and a stock purchase is often the first major negotiation point, heavily influenced by liability and tax implications.
If you are researching how to buy a business, you likely already know the basics: buyers generally prefer asset deals to cherry-pick assets and leave liabilities behind, while sellers prefer stock deals for cleaner exits and tax treatment. But in Florida, the nuance runs deeper.
Florida Specifics
In Florida, successor liability in asset sales is generally limited, but there are exceptions, specifically regarding fraudulent transfers to avoid creditors or mere continuation of the business. If you are the buyer, simply calling it an “asset sale” doesn’t automatically shield you if the operations remain identical.
- Asset Purchase: You buy the machinery, client lists, and IP. You leave behind the lawsuits and unknown debts.
- Stock Purchase: You step into the seller’s shoes, warts and all. This requires significantly more robust indemnification clauses.
The Four Pillars of the Definitive Agreement
Once the structure is set, the definitive agreement (whether an Asset Purchase Agreement or Stock Purchase Agreement) becomes the rulebook. While these business agreements can run dozens of pages, their effectiveness relies on four core pillars.
1. Representations and Warranties (“Reps & Warranties”)
These are the statements of fact made by the seller about the business. In 2025, we are seeing heightened scrutiny here, particularly regarding tariff exposure and digital compliance. If a seller represents that their intellectual property is secure, and it turns out they don’t own the code, this clause is your mechanism for recovery.
2. Covenants
These are promises to do (or not do) specific things.
- Pre-closing covenants: make sure the seller operates the business in the “ordinary course” so the value doesn’t drop before you take the keys.
- Post-closing covenants: often involve non-competes and transition assistance.
3. Closing Conditions
These are the “walk-away” rights. If specific conditions aren’t met, such as securing financing, obtaining regulatory approval, or third-party consents, the deal does not close.
4. Indemnification
This is your financial safety net. It dictates who pays whom if a representation proves false or a covenant is breached. Negotiation here is fierce, focusing on “baskets” (a deductible before the seller pays) and “caps” (the maximum amount the seller will pay).
The Clauses That Cause 90% of Post-Closing Lawsuits
Research suggests that the vast majority of M&A lawsuits in Florida stem from ambiguity in three specific areas.
1. The Purchase Price Adjustment
The price on the LOI is rarely the exact check written at closing. Adjustments are made based on working capital (current assets minus current liabilities). Disputes arise when the definition of “working capital” is vague. Does it include stale inventory? What about uncollected receivables?
We advocate for detailed accounting examples included directly in the schedule to prevent “interpretation” later.
2. The Earn-Out Provision
Earn-outs are useful for bridging valuation gaps, but they are litigation magnets. If a seller gets paid more based on future performance, they will want control over how the business is run post-closing to confirm they hit those targets. As a buyer, you want autonomy.
Define “Net Income” or “EBITDA” rigorously. Explicitly state the buyer’s right to manage the business, or the seller’s specific role.
3. Florida Non-Compete Agreements
Florida has strict statutes regarding restraint of trade. A generic non-compete template often fails in court. To secure a non-compete for my business, you must prove a “legitimate business interest” (like protecting a customer list) and the restriction must be reasonable in time and geography.
In an M&A context, courts are more lenient than in employment contracts, but drafting errors here can leave a buyer paying for a business while the seller opens a competitor next door.
Mastering the Negotiation Strategy
Effective contract drafting is about leverage.
Leverage Points for Buyers
- Exclusivity: If you have an exclusivity period in your LOI, use that time to dig deep. The deeper you go, the more risk you find, which translates to better indemnity terms or price reductions.
- The “Sandbagging” Clause: Fight for the right to sue for a breach of warranty even if you knew about the issue before closing. Florida law allows this generally, but the contract should be explicit.
Leverage Points for Sellers
- Knowledge Qualifiers: Limit your reps to what you “actually know,” rather than what you “should have known.”
- Survival Periods: Negotiate shorter timeframes for the buyer to make claims against you. After 12 to 18 months, you want to know your exit proceeds are truly yours.
Why Florida Deals Require Local Experience
You might ask, “Can’t any corporate lawyer handle this?” The answer lies in the nuance of Florida law versus Delaware or New York law. From specific real estate transfer taxes to the unique “homestead” protections that can complicate personal guarantees, Florida operates differently.
Having a dedicated mergers & acquisitions attorney leading your team makes sure that local statutes regarding corporate governance and dissolution are applied correctly, preventing technicalities from derailing your transaction.
The Next Step in Your Evaluation
A merger or acquisition is likely one of the most significant financial events of your career. It requires a legal team that balances aggressive protection of your interests with the pragmatic goal of getting the deal closed efficiently.
At KEW Legal®, we combine big-law precision with the agility of a boutique firm, making sure you have the clarity and confidence to sign on the dotted line.
Ready to discuss your transaction strategy? Contact us today for a consultation.
