Acquisition of a business - how to do it?
If a business shall be purchased either the assets of a company ("asset deal") or the shares in the target ("share deal") can be acquired. Frequently, the respective decision between asset and share deal is based on tax aspects.
The "first contact" is usually preformed after a non disclosure agreement has been signed which is normally in particular in the interest of the vendor. Sometimes such confidentiality clauses are also part of a - predominantly non-binding - letter of intent (or heads of agreement).
The negotiations of the share or asset purchase agreement are usually preceded by due diligence investigations during which auditors, tax advisors and lawyers will screen the target. The results are summarized in so called due diligence reports which identify and evaluate all the risks which might have an influence on the decision of the potential buyer.
If a business shall be purchased either the assets of a company ("asset deal") or the shares in the target ("share deal") can be acquired. Frequently, the respective decision between asset and share deal is based on tax aspects.
The "first contact" is usually preformed after a non disclosure agreement has been signed which is normally in particular in the interest of the vendor. Sometimes such confidentiality clauses are also part of a - predominantly non-binding - letter of intent (or heads of agreement).
The negotiations of the share or asset purchase agreement are usually preceded by due diligence investigations during which auditors, tax advisors and lawyers will screen the target. The results are summarized in so called due diligence reports which identify and evaluate all the risks which might have an influence on the decision of the potential buyer.
M&A
No matter whether it is a sale or an acquisition: an M&A transaction needs to be well-prepared.
Whoever intends to sell assets or even the shares of his company will soon be visited by the advisors of the interested party. They will perform many investigations with regard to economic, tax and legal aspects within a so-called due diligence and will ask you for the way to the data room. All information and documents which might have an influence on the investor's decision will be collected in such (frequently only virtual) data room.
If you have systematically prepared all the necessary documents and put them into a data room already prior to any receipt of a request list of the potential buyer, the transaction can be signed and closed much more smoothly and will have the happy end which you envisaged. And if you have even performed a Vendor Due Diligence or a Fact Sheet of the target in advance, you can swiftly enter into the negotiations of the terms and conditions of the deal.
For all legal questions in connection with the sale of your company you should seek the advice of an expert, knowing very well the expectations of the other party. Professional support, beginning with the preparation of the data room and ending with the closing of the transaction will help you to stay in the driver's seat.
The same principles apply if you intend to invest in a company or even acquire it entirely. Only if you apply the necessary care - the "due diligence", examining the target and identifying and containing any risks by negotiating adequate legal terms and conditions, will you be able to protect yourself against any bad surprises.
Whoever intends to sell assets or even the shares of his company will soon be visited by the advisors of the interested party. They will perform many investigations with regard to economic, tax and legal aspects within a so-called due diligence and will ask you for the way to the data room. All information and documents which might have an influence on the investor's decision will be collected in such (frequently only virtual) data room.
If you have systematically prepared all the necessary documents and put them into a data room already prior to any receipt of a request list of the potential buyer, the transaction can be signed and closed much more smoothly and will have the happy end which you envisaged. And if you have even performed a Vendor Due Diligence or a Fact Sheet of the target in advance, you can swiftly enter into the negotiations of the terms and conditions of the deal.
For all legal questions in connection with the sale of your company you should seek the advice of an expert, knowing very well the expectations of the other party. Professional support, beginning with the preparation of the data room and ending with the closing of the transaction will help you to stay in the driver's seat.
The same principles apply if you intend to invest in a company or even acquire it entirely. Only if you apply the necessary care - the "due diligence", examining the target and identifying and containing any risks by negotiating adequate legal terms and conditions, will you be able to protect yourself against any bad surprises.
Due Diligence… Data Room Management … Shareholders Agreement … Heads of Terms ... Consortium Agreements … Share Deal … Option Agreements … Asset Deal… Vendor Due Diligence … Incorporation of the Acquisition Vehicle … Merger Control ... Letter of Intent ... Distressed M&A
Other topics relating to special situations: