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Don’t Count on a Non-Compete

The challenge facing printing company owners over whether and how to secure non-compete agreements was debated recently with a lively exchange of views on the NAQP listserv. Having encountered this issue from an M&A and business valuation perspective for many years, and being sensitive to the legal implications, given my background as a lawyer, I unequivocally weigh in that a Non-Compete Agreement is NOT the ultimate solution to protect general intangibles.

Tuesday, May 25, 2010

A non-compete agreement is NOT the ultimate solution to protect general intangibles.

A Boston-based client said it very well several years ago when considering Merger and Acquisition (M&A) options for his "treading water" printing company: "My press operator doesn't think he can take home the press. Why does my salesperson think he can just take the customers?"

The challenge facing printing company owners over whether and how to secure non-compete agreements was debated recently with a lively exchange of views on the NAQP listserv. Having encountered this issue from an M&A and business valuation perspective for many years, and being sensitive to the legal implications, given my background as a lawyer, I unequivocally weigh in that a Non-Compete Agreement is NOT the ultimate solution to protect general intangibles.


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