Buying & selling businesses

Assets sales take the assets of the business out of own vehicle into another. They may be at arm’s length or part of a group restructure. The process is largely governed by an Assets Sale Agreement (“APA”) although there are normally other pre-sale and post-sale documents that need to be put into place and the due diligence process. It is important to cover:

• What assets are being sold and what assets are excluded?
• Employee and TUPE issues
• Warranties and limitations of liability
• Apportionment of receipts pre and post-sale
• Assignment of contracts
• Consents
• Price and how paid
• Completion matters

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Share sales sell the whole company so that there is a complete change in the shareholders. The process is largely governed by a Share Sale Agreement (“SPA”) although there are normally other pre-sale and post-sale documents that need to be put into place and the due diligence process.

It is important to cover:

• Title to and transfer of the shares?
• Tax
• Warranties and limitations of liability
• Consents
• Price and how paid
• Completion matters

For more advice on buying & selling business, please contact us.

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A joint venture may consist of a specially constructed company or be contractual with aim to join forces to create a new venture or achieve growth. Often seen to bring new ides or products to market or to facilitate an objective to be met. Aspects of the relationship need to be carefully considered and may cover;

• Choice of vehicle
• A Joint Venture Agreement or Shareholders Agreement governing the relationship between the owners
• Transfer of assets, shares and carving up rights and obligations
• Establishing the business and purpose of the JV
• The composition of the board and management arrangements
• Share capital and funding of the JVC
• Distribution of profits
• Restrictive covenants
• Protection of minority and majority interests (if applicable)
• Resolution of deadlocks
• Transfer of shares or assets
• Termination

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An MBO describes a transaction where the existing management team of a business (or some members of that team) acquire a stake in the business, typically with the help of delayed payment terms or private equity financing who also takes a stake in the business. The incumbent management remains in place post-acquisition.

They are usually completed as a share sale with support for the purchase price and a different approach may be taken to the due diligence process and warranty protection.

For more advice on management buyouts, please contact us.

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