§ Growth and Change
Businesses develop over time with changing needs requiring different resources to feed their development.
Growing companies often look for different ways that they can expand. Acquisitions by share purchase and asset acquisitions are two distinct ways that businesses can make this expansion.
Alternatively, change may simply need new investment to feed that growth plan. Investors may want long term reward from a shareholding with no involvement in the business itself and will often be prepared to back the right Board in this way without any further interference. Others may be looking for control of a company and their decision to purchase shares in a target company may be driven solely by this goal.
In making an acquisition on any scale, it is possible for the incoming party to realise the advantage of the hard work and skills of others, thus benefiting from the reputation and goodwill of the target business. Asset purchases, on the other hand, allow for the cherry-picking of useful resources, such as the acquisition of new premises in an ideal location. Naturally the price of the acquisition will reflect the goods on offer!
§ Acquisition & Disposal
The Share Purchase Agreement involves a strategic consideration of the business on behalf of the buyer or seller; incorporating warranties for the benefit of the buyer or seller protection measures for the safeguarding of the seller. A close working relationship with the accountants will ensure that tax clearances are in place in time and tax covenants are appropriate and proportionate.
Deferred purchase terms may give rise to questions of security and inter company loans or assistance may necessitate further and specific attention to Companies Act compliance.
At Devine Law directors and shareholders will benefit from years of experience with mergers, acquisitions and disposals and documentation will be unambiguous and effective. Due diligence will be thorough and will concentrate on areas of potential exposure. Matters of compliance and directors duties are handled with diligence and all parties will be left with no doubt as to their areas of either risk or strength.
§ Merger & Demerger
Financial or strategic considerations may make a merger with another entity important to the future growth or survival of a business; alternatively, a family owned group of companies may grow to the point where demerger is equally vital. The issues on both sides of the coin are complex and due diligence is the name of the game. Handling personalities may be an important part of the transaction and at Devine Law we are used to acting as informal mediators when the need arises.
Compliance with statute and regulations are a necessity with detailed transactions of this nature and the Devine Law team has experts to hand.
When the owner decides to sell on the business, the first port of call is often the senior management team who, through a management buy-out, are usually best placed to pick up the reins and take the business forwards. The interests of buyers and sellers will potentially be at significant variance and for a relatively inexperienced management team making the purchase, having Devine Law on your side will be a major asset. A number of experienced owners have already had the benefit of Devine Law being in their corner!