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IF YOU HAVE spotted a great business acquisition opportunity and the headline figures look superb, how do you know that you will be getting the value and benefits in the deal that you had hoped for?
The key lies in the quality and depth of the due diligence carried out by your advisors, especially in regard to the transferability of the business contracts.
“It is a sad fact that some otherwise viable acquisitions have failed to succeed as a result of important contracts not being transferable to the acquiring business,” says Tom Bodkin pictured below, a partner in the corporate and commercial team with Borneo Martell Turner Coulston.
After you have reached agreement in principle on the main heads of terms with the owner of your target business, the due diligence process will soon begin.
Obtaining copies of contracts
Our solicitors will request form the seller’s solicitors all the documents that you will need to see before you even consider exchanging contracts on the deal. This will require the seller to provide a copy of every contract that is relevant to their business. It is likely that you will be asked to sign a confidentiality agreement prior to the disclosure, and our solicitors can advise you on its terms.
We will be happy to discuss any queries you may have at disclosure stage and can liaise with the seller’s solicitors regarding any missing or unusual documents.
It is vital that you have sight of a complete contractual ‘snapshot’ of the business at that moment in time. By analysing the contracts in detail, you will find out a great deal about the business, both for the better and for the worse.
How we can help
We will help you to navigate the transfer of business-critical contracts at the time of the acquisition, so that you can be confident about maximising the return on your investment.
If you need advice regarding a business purchase and the related due diligence, it is vital you speak with a corporate or commercial lawyer with the correct knowledge and experience as early as possible.
For an informal discussion, contact Tom Bodkin in the corporate and commercial team on 01604 622101 or email
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.