Buying a Business
Business Acquisitions and Management Buy Ins
When a client retains us to help them buy a business, we will advise and assist them throughout the entire process to ensure their objectives are delivered.
The purchase of a business can be a complex and lengthy undertaking, and our experienced team of corporate solicitors has a strong track record, which is demonstrated by the positive testimonials that we receive from our clients. We also advise clients with joint venture agreements and private placings.
What Does Our Work Include When we Buy a Business for a Client?
The core of our work when buying a business for a client will include some or all of the following:
- Heads of terms,
- Legal due diligence,
- Confidentiality and lock out agreements,
- Tax indemnities,
- Share purchase/business sale agreement,
- Disclosure letters,
- Advising on employee issues, and
- Deeds of contribution amongst the outgoing shareholders.
Typically, there are two broad areas that fall within the category of business acquisition:
- Firstly a share purchase, and
- Secondly an asset purchase.
In the former, as the name suggests, there is simply a purchase of some or all of the shares in a company. In the latter, it is a company’s assets that are purchased, including property, stock, equipment and goodwill from clients and suppliers.
Every deal is different, of course, carrying different risks and benefits to the buyer. Our aim is always to fully understand the buyer’s objectives. When this added to a detailed knowledge of the target business and the sector it operates in, it enables us to manage the buying process smoothly and efficiently.
Attention to Detail is Key When Buying a Business
Whether it’s a share transaction or an asset purchase, all business acquisitions carry an element of risk. So our work in supporting the buyer focuses on attention to detail and due diligence at all times, to ensure the deal works for our client at the moment of purchase and in to the future. Whenever necessary we will lead detailed negotiations with the seller on our client’s behalf.
Above all, we ensure that the acquisition process for our client is executed smoothly and professionally. This includes the transfer of key elements such as licences, permissions and contracts as well as the assignment of leases and other transitional arrangements.
What About Management Buy-Ins?
In essence a management buy-in is the same as a business acquisition in that a business ends up with new owners. Typically, however, our experience is that management buy-ins present some additional challenges of their own. This is usually because the buy-in team lacks detailed prior knowledge of all aspects of the businesses they are buying in to.
When we are supporting management buy-ins, the due diligence process is perhaps more crucial than ever along with the need for strong warranty and indemnity protection
In addition it often the case that smaller management buy-ins are funded, to some degree, against the assets of the business. As a result, the buy-in management team with will need to contribute some of the purchase price personally, which carries with it a degree of personal financial risk.
We are experienced in handling the legal and commercial challenges that arise with management buy-ins.
Business Restructuring and Reorganisations
A key issue that arises when buying a business, including management buy-ins, is how it needs to be structured or restructured within the new owner’s business set up. Is it to be a standalone business or will it be fully integrated? We advise the new owners of the business on the most appropriate structure.
Contact us if You are Planning a Business Acquisition or Management Buy In
If you are planning to buy a business, contact us or call us on +44(0)121 214 2490 for a free initial discussion.