Thinking about buying a business?

If you’re looking to acquire a business, there are of course many things to consider. You may be looking to grow your existing business through an acquisition, or take a competitor out of the market by taking them over. Perhaps you want to diversify your offering through buying a new business in a complementary sector to that which you already operate. Or, maybe you’ve simply seen an opportunity which you feel you can develop. 

Whatever your motivation, you will need to ensure that you have the right team around you. Solicitors, accountants, tax advisors and specialist professionals will be vital to guarantee that there are no surprises after the purchase completes.

What to consider when choosing your solicitor

When choosing your solicitor, consider the following four questions:

• Are they going to add value to the transaction?
• Do they have the necessary resources to cover all bases?
• Will they actively protect your interests?
• Do they understand the market implicitly?

At Birkett Long, we have the experience, resources and knowledge to best protect our clients' needs. Whether you are purchasing a business for £20,000 or £20,000,000 we are able to put together the right team to guide you through the process and most importantly protect your interests.

How do Birkett Long add value to a business purchase transaction? Having worked on numerous acquisitions over our 200-year history, we always spend time getting to know our clients, understanding their existing businesses, attitudes to risk and which aspects of a purchase the client will need the most assistance with. 

We understand that different clients will have different needs, depending on the industry they are in. For example, if seeking to purchase a care home, matters of particular importance may relate to local authority contracts and how employment related matters have been handled. Whereas, if seeking to purchase a haulage company, matters relating to finance agreements, vehicle ownership and property are likely to be of greater concern.

Identifying the areas that are of key importance and that require legal input ensure that our time, and a client’s money, is spent in a focussed manner rather than dealing with issues that a client or other better placed professionals are able to pick up.

Having worked on a large number of purchases over the years, we are experienced as to the manner in which different sellers are likely to approach a deal. 

Again, this knowledge adds value to our clients as it ensures that we are able to tailor our approach to the likely requirements of the seller. 

Depending upon whether you are buying from a private equity house, trade seller or part of a management buy out team, we are able to tailor our work to fit the needs of the seller whilst not diminishing the protection afforded to our client, the buyer.

Experts you can trust

When buying a business, there will no doubt be a variety of different legal issues that arise along the way. Usually there will be one solicitor leading on a transaction, but behind the scenes it is important to know that you have individuals who have the proper training and knowledge to handle all of the issues that may arise. It is unlikely that one person would either be able to deal with or have the knowledge to handle queries relating to all of the different areas of the law. We are able to draw together as broad a team as is necessary to assist with your business purchase. 

Often, there will be a need for involvement from our employment and commercial real estate teams, but we are also able to advise on more specialist aspects, such as:

• Environmental matters
• Health and safety 
• Licensing and other regulatory issues
• Intellectual property
• Banking 

Being able to draw upon specialists within the firm ensures we are able to effectively manage the transaction for you.

How will your interests be protected? 

When buying a business there will, more often than not, be a period of due diligence that is undertaken by the buyer and their professional team. 

Due diligence gives buyers the opportunity to test out the target business and attempt to identify any problems or issues that may exist. However, there is always a potential risk that the seller does not reveal the full extent of a defect or problem or that there is a defect at all. 

It can be the case that it is only post-completion that the buyer truly finds out what they have purchased and any problems that may be lurking under the surface. This is why it is vitally important as a buyer to have a well drafted agreement which gives you protection in the event that a problem is discovered post-completion. 

Much of the protection afforded to a buyer will come in the form of warranties that are given by a seller at completion. In the event that there is a breach of a warranty, buyers - subject to certain contractual clauses - will have the right to make a claim in damages against the seller. 

If liabilities can be identified as part of the due diligence process, it may be that an indemnity can be agreed or reduction in the purchase price.

Another way of securing a buyer's interest is to look at structuring the payment in stages. This gives you as a buyer the opportunity to withhold a proportion of the purchase price until certain conditions have been met, or time has elapsed. 

Buyers may also be able to structure a deal to allow for an earn out, therefore basing a proportion of the purchase price on the future performance of the business. 

All these provisions give you protection and encourage the seller to be open and honest in the lead up to a sale, placing at risk part of the purchase price in the event that they have been untruthful or misleading in the sale process.

With the right team on your side, you can ensure there are no surprises after the purchase completes.

If you would like to find out more about how we at Birkett Long could help with your business acquisition, please feel free to contact me directly on [email protected] or 01206 217354.