Mergers, Acquisitions and Sales Legal Support
On any view, the process of merging, acquiring or selling a business is complex. The starting point is, of course, your vision of what you wish to achieve. Our role is to help achieve that goal. We simplify this by dividing the process into its constituent stages.
Although the process is different depending on whether you are merging, buying or selling, the stages broadly follow the following pattern:-
- Review your own business to ensure your own house is in order;
- Investigate the other party – initial “due diligence”;
- Explore the funding options, the possible legal structures appropriate to the transaction and tax consequences of each;
- Negotiate and agree the deal in outline – “heads of terms”;
- Undertake full “due diligence” both legal and financial;
- Agree the final terms and complete the transaction.
At each stage there is likely to be the need for advice, guidance and legal documentation. For instance:
- Understanding what enquiries are likely to arise in the course of the deal will allow you to investigate and prepare your answers and collate the relevant documents – this might save delays and embarrassment!;
- initial “due diligence” almost always involves some disclosure of confidential information. This is best done under the protection of a nondisclosure agreement “NDA”;
- The possible legal structures is a crucial topic and although most transactions involve either a “share sale” or and “asset sale”, there may be circumstances in which a new business vehicle should be created for the particular transaction e.g. “Newco” or perhaps the formation of an limited liability partnership;
- Although heads of terms are not binding, they often set the parameters of the parties expectations and needs to be concluded with care;
- The extent and nature of the questions posed together with the answers given during the due diligence process are always a key stage not just to the ultimate completion of the deal but whether a party has any comeback on the other after the deal is done.
- The relevant legal agreements intended to complete the transaction need to be prepared to reflect both the letter and the spirit of the heads of terms.
Our legal team have extensive experience in guiding clients through this process.
For more information please contact David Bacon or Andrew Devereux on 01604 622101.