Mergers and Acquisitions Lawyer · Nashville
Mergers and acquisitions,
drafted for the after-tax check.
Built for the LOI, the diligence, and the wire.
By Knight Lancaster, JD, CPA · Last reviewed May 2026
Sell-side and buy-side, $2M to $25M.
A mid-market sale or acquisition is decided over six to twelve months and tens of pages of paper. The price gets settled in the second week. The structure, asset versus stock, the working capital peg, the LOI's no-shop, the indemnity caps, the escrow, the rollover, gets settled across the next four months and decides what the seller actually keeps after tax. We draft and negotiate that paper for closely held Tennessee businesses on both sides of the table.
Knight has led mergers, acquisitions, and dispositions for closely held Tennessee businesses in the $2M to $25M range. The work runs the full arc. Pre-sale planning. The investment-bank engagement letter. The data room. The LOI. The definitive purchase agreement. The closing. The 90 days after.
On the sell side, we represent the founder, the family, or the partnership selling to a strategic buyer, a private equity firm, a family office, or a competitor. On the buy side, we represent the operator, the search fund, or the family acquiring an existing business as a platform or as an add-on.
The substantive work is the same on both sides of the table. The interests on the page are not. The lawyer who has done it from both sides asks the right questions either way.
Asset, stock, 338(h)(10), or rollover.
The structure decision is the largest single tax decision in a sale. We model the four against each other before the LOI is signed, not after.
Asset purchase
Cleaner for the buyer.
The buyer buys the assets and assumes specific liabilities, gets a step-up in basis, and a depreciation schedule that runs forward. The seller pays ordinary income on the depreciation recapture and capital gain on the rest.
Stock purchase
Cleaner for the seller.
The buyer acquires the equity. The company comes with its history attached. The seller takes capital gain treatment across the whole price. Riskier for the buyer, kinder to the seller's tax bill.
Section 338(h)(10)
Stock legally, asset for tax.
Available where the target is an S-corp or a consolidated subsidiary. The buyer gets the asset-deal basis step-up while keeping the legal continuity of a stock deal.
F-reorg + rollover
Restructure, sell, roll forward.
The seller's S-corp restructures into a holding company and an operating subsidiary. The buyer purchases the operating sub. The seller often rolls 10–30% into the post-close company, with §351 deferral on the rolled portion.
What the buyer's lawyers will actually pull.
A clean diligence file shortens the closing timeline, narrows the rep-and-warranty package, and settles the indemnity negotiation in the seller's favor. We get the file ready before the buyer asks.
| Corporate | Formation documents, qualifications to do business, board and member minutes, equity ledger, prior financings. |
| Financial | Three years of statements, AR/AP aging, debt schedule, working-capital ratios, customer concentration. |
| Tax | Federal and state returns for the last three to five years, sales-tax filings, payroll filings, residency, Tennessee franchise and excise, nexus analysis. |
| Employment | Handbook, classification of contractors, severance arrangements, equity and phantom-equity grants, restrictive covenants. |
| Intellectual property | Trademarks, copyrights, patents, the work-for-hire chain, open-source compliance. |
| Contracts | Customer agreements with assignment clauses, vendor agreements with change-of-control language, exclusivity and most-favored-nation provisions, termination rights. |
| Regulatory & environmental | Licenses, permits, Phase I site assessments where the deal touches real estate. |
"The closing day's number is rarely the number that arrives."
The handshake that already changed the deal.
A signed letter of intent binds more than the parties usually realize. The exclusivity clause locks the seller out of other buyers for 30, 60, or 90 days. The no-shop language survives the LOI's expiration in some drafts. The indicative purchase price is psychological even when it is non-binding; once the parties sign, the buyer's first definitive offer rarely moves up.
The working capital peg, the cash-free debt-free assumption, and the basket-and-cap structure on indemnities are all set in the LOI long before the formal definitive agreement gets drafted.
We negotiate the LOI knowing what the definitive agreement is going to say. The LOI is the deal's first draft, not its last brochure. We read the two together.
Escrow, holdbacks, the working-capital true-up.
The day of close, the wire arrives in escrow or in the seller's account. The 60 days after, the working-capital true-up either adds to that wire or claws back from it. The 18 months after, the indemnity escrow either releases or absorbs claims against the rep package. The 24 to 36 months after, the rollover equity either pays out at the next sale or sits.
We model the holdback, the escrow release schedule, and the working-capital adjustment ahead of close so the seller knows what the actual cash schedule looks like, not just the headline.
The number on the wire is not the number you keep.
The structure decisions ripple straight into the seller's personal tax return. Each of these is a number. We run them against the actual basis, the entity, the state residency, and the timing on the calendar year. The Lancaster CPA Firm prepares the returns the year after close. One firm, one set of facts, no surprise on the personal return in April.
The provision
Section 1202 QSBS
What it does
A founder of a qualifying small business C corporation can exclude the greater of $10M or 10x basis on the sale of qualifying stock, federally tax-free, after a five-year holding period. On a $5M or $50M sale, depending on the basis, this is the most powerful single item in the federal tax code for closely held founders.
The provision
Section 338(h)(10) election
What it does
Treats the stock sale as an asset sale for tax purposes when the seller is an S-corp or a consolidated subsidiary. Hands the buyer a step-up in basis without a legal asset transfer.
The provision
Section 351 deferral on rollover equity
What it does
Lets the seller roll a portion of the deal into the buyer's holding company without immediate recognition.
The provision
Allocation across asset classes
What it does
Class IV, V, VI, and VII allocations decide how much of the purchase price gets ordinary-income treatment and how much gets capital-gain. The allocation is negotiated. The math runs into the seller's return the same year.
When the buyer is the partner, the kid, or the senior team.
Not every deal goes to a stranger. A partner buyout, a transfer to the next generation, a management buyout, or a direct sale to the senior team all run through the same paper as a third-party transaction, with different relationship constraints and different tax angles. We draft these alongside the buy-sell agreement, the operating agreement, and the family-transfer documents that govern them.
For the document-level mechanics, see the business services pillar.
From a buy-side client
"Knight represented us in a complex acquisition of a business involving franchise territory rights, SBA, investors, and he delivered exactly what we needed and more. He led with navigating diligence, structure, and deal terms. He flagged key risks early, negotiated practical protections, and kept the transaction moving with the bank and franchisor. The experience with buy-side M&A helped keep me informed from LOI to closing and avoided surprises. Aside from getting the deal done, I personally learned so much from Knight during this process. I will only deal with Knight for future acquisitions and strongly recommend him for buy-side deals."
— Dylan R.
Every M&A decision has a money side. The structure you accept in the LOI changes the seller's federal tax bill by hundreds of thousands of dollars. The allocation across asset classes changes whether the closing wire is mostly capital gain or partly ordinary income. The rollover percentage changes how much of the deal sits in the buyer's holding company instead of the seller's brokerage account. As a CPA, Knight sees the money side and the legal side at the same time, so the document he negotiates is the one that holds the deal and the one that does not surprise the seller in April. Tennessee bar admitted, dually licensed as a Certified Public Accountant, recognized in Best Lawyers in America.
The deal documents and the tax return, drafted by the same hand.
M&A, answered.
How much does an M&A lawyer cost in Nashville?
The cost depends on the size of the deal and the side. For a defined-scope sell-side engagement on a $2M to $15M transaction, we work on a flat-fee basis in many cases. For a larger or more complex deal, a multi-buyer auction, a strategic with diligence theater, an inside transaction with multiple sellers, we bill hourly with a clear estimate. Hourly rates for M&A counsel in Nashville generally run from $300 to $700+ depending on the firm and the seniority. We quote a specific dollar amount after the first conversation.
Buy-side or sell-side, do I need different counsel?
The substantive expertise is the same. The interests on the page are different. We represent both sides, but never on the same deal. Most owners selling their own business find that a lawyer who has done both sides asks the right questions either way.
What is QSBS and do I qualify?
Section 1202 of the Internal Revenue Code lets the founder of a qualifying small business C corporation exclude federal capital gain on the sale of stock, up to the greater of $10M or 10x basis, after a five-year holding period. The qualification rules are technical: gross asset test at issuance, active business test, qualified trade or business test. We screen the question early because some structuring moves, including conversions out of an S-corp, disqualify QSBS retroactively.
When should I hire an M&A attorney before a sale?
Twelve to twenty-four months before the target close is the comfortable window. Six months is workable. Two months is reactive. Less than two months, typically an unsolicited offer the seller wants to accept, is the situation we get hired into often. It still works. The seller has fewer levers than they would have had with more runway.
Can the same firm prepare my taxes after the deal?
Yes. The Lancaster CPA Firm prepares the corporate, partnership, and personal returns that come out of the legal work. Most owners selling a closely held business find that having one firm read the deal documents and file the resulting returns produces a tighter outcome than splitting the work across two firms.
What is the difference between a business sale and a business succession plan?
A sale is a transaction with an outside party. A succession plan is the broader framework that decides who owns and runs the business at retirement, death, or departure, of which a sale is one possible outcome. Family transfer, management buyout, and inside sale are the others. We handle both the deal and the planning.
Reviewed by Knight Lancaster, JD, CPA, MBA
Knight Lancaster is the founder of Lancaster Law, P.C. and The Lancaster CPA Firm, P.C. in Nashville, Tennessee. He is one of a small number of attorneys in Tennessee who is also a licensed CPA, giving him a dual perspective on the legal documents and the tax returns that follow them. Knight has been recognized in Best Lawyers in America, Ones to Watch (Corporate Law), in 2023 and 2024, and serves on the Board of Directors of the American Academy of Attorney-CPAs. He earned his JD and MBA from Belmont University (the first graduate of Belmont's joint JD/MBA program) and a BS in Accounting from the University of Tennessee. Before founding Lancaster Law, Knight practiced at Bone McAllester Norton (now Spencer Fane), where his work focused on mergers, acquisitions, dispositions, and securities matters.
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This article is for educational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. For advice specific to your situation, contact Lancaster Law directly.
Tennessee Bar
Practicing since 2019
Triple credential
JD · CPA · MBA
Peer-reviewed
Best Lawyers, Ones to Watch, 2023 + 2024
National board
American Academy of Attorney-CPAs, Director
M&A counsel across Tennessee.
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