Jul 24, 20202 min
Updated: Oct 14, 2021
Watch the second part of our webinar series: IT’S TIME – Understanding Legal Structures & Governance with Nathan Daniels. Nathan is one of BC’s top M&A lawyers – helping guide business owners through these interesting times.
In this presentation, Nathan shared his experience working with business owners through a global pandemic and what you should be aware of prior to the sale of your business.
View the full webinar below:
Types of private company transactions:
1. Purchase transactions
Bolt-on acquisition
Transformative acquisition or merger transaction
2. Sale to third parties
Strategic buyer
Private Equity fund
3. Transition to family or sale to management
Key Steps In the Process:
1. Getting prepared
Making sure you really want to sell
Legal preparation for a sale
Legal preparation for a purchase
2. NDAs and preliminary due diligence investigation
3. Letter of Intent (LOI) and exclusivity
4. Confirmatory due diligence
5. Structuring
Tax impact on Vendor – LCGE
Tax impact on Purchaser
Responsibility for historical liabilities
How hard is it to assign contracts (if an asset sale)?
Alternatives:
Sale of shares
Sale of assets
Pre-closing reorganization/hybrid transaction
6. Purchase Agreement
7. Disclosure Schedules
8. Non-Competition Agreement
9. Bank financing
10. Employment Agreements for senior management
11. Employment offers for other employees (if an asset sale)
12. Closing = $$$
13. Integrating the two businesses
14. Corporate governance
Composition of the Board of Directors
Shareholders Agreement
15. Working capital adjustment
16. Indemnity claims
Key Challenges:
Disclosing information to:
Competitors
Customers
Suppliers
Employee Issues:
When to tell them
Double the workload during the deal
Retaining them
The “Price Grind”
When to expect it
How to respond?
Closing the value gap
Vendor take back (VTB) financing
Earn outs
Avoiding post-closing claims
Working capital adjustment disputes
Financial statement not “GAAP”
Condition of assets warranty
Compliance with laws warranty
The QUALITY of your advisors and the TIME you INVEST in preparing the disclosure schedules is KEY!
Nathan Daniels – Partner – M&A | Private Equity
Nathan has over 25 years of experience assisting clients on M&A and private equity transactions. He acts primarily for private equity funds, entrepreneurs, and management teams on transactions involving private companies. The Canadian Legal Lexpert Directory lists him as Repeatedly Recommended as a leading lawyer in the area of private equity. In addition to working on deals in Western Canada, Ontario and Quebec, Nathan also has significant international experience, advising on many Canada/US cross-border acquisitions and cross-border private equity transactions. He also worked for several years in the London, UK office of Freshfields Bruckhaus Deringer LLP, a leading international firm.
Anchor Pacific Investment Management Corp. (“Anchor Pacific”) is a Vancouver, BC-based portfolio management firm, which leverages process, technology, and infrastructure to democratize the process of managing endowment and pension style investment portfolios to deliver innovative, high-touch, and transparent investment programs across the full spectrum of asset owners and investment consumers.
To learn more about how Anchor Pacific can help you shelter, protect, and grow your money, contact us at 604-336-9080 or info@anchorpacificgroup.com