You have built success and are looking to purchase and expand. Or you are looking to sell your company and cash out. To ensure that you can maximize the benefits of your sale and minimize the potential losses, it is essential to understand the process, and have the right counsel.
Apex Corporate Law is here to help clients in New York, Delaware, and beyond get the best possible results, whether they’re buying, or selling their business.
buying and Selling
A business
Buying a business
Buying a business isn't your everyday shopping trip.
When buying, you're scouting the landscape, looking for a business that aligns with your goals, has a solid foundation, and offers growth potential— all signs that you're betting your money on a winning hand. Some keys things to consider include:
Strategic Fit and Goals: Before you even start looking, know what you want. It’s like picking a destination before you book a flight—ensures you don’t end up somewhere you never intended. The right fit will help catapult you to your goals, while the wrong one will be a liability weighing you down.
When Disney purchased Marvel in 2009 with $4 Billion, they battled skeptics who questioned the move. However, it is clear that they knew Marvel’s and their own brand, value, and potential.
Financial Analysis: Dive deep into the numbers. It’s not just about what the business is earning but how it's earning it. Check for hidden icebergs that could sink the ship.
Legal Due Diligence: This isn’t just a cursory glance; it’s a thorough comb-through. You’re looking for any legal skeletons that could jump out of the closet later. Many businesses are only as valuable as their documents, whether it’s IP which creates defensibility, or contracts which crystallize their business relationships.
Negotiation of Purchase Terms: Don’t just accept the sticker price. Negotiation is your tool to sharpen the pencil and get the best deal possible. Everyone wants to get the edge, ensure that you don’t give in unreasonably. Always be prepared to walk away.
Selling a business
On the selling side, it’s all showcasing your business's value, finding a buyer who’s willing to pay top dollar, and exiting the game gracefully and profitably.
When buying, you're scouting the landscape, looking for a business that aligns with your goals, has a solid foundation, and offers growth potential— all signs that you're betting your money on a winning hand. Some keys things to consider include:
Preparation and Presentation: Spruce up your business. Address any issues that could turn off buyers or drive down the price—like staging a home for sale. Ensure that your business is in its best condition to attract the market of buyers.
Valuation: Know what your business is truly worth. This isn’t just about profit but potential. It’s setting the stage for negotiations.
When Facebook purchased WhatsApp for $19 Billion in 2014, it was their biggest purchase at the time. WhatsApp knew that they offered Facebook something that they lacked: Direct Messaging. They made their money and Facebook got to dominate the global instant messaging market.
Handle Offers Strategically: Evaluate offers not just on price but on terms and the buyer's potential to close the deal. It’s not just who offers the most but who will actually follow through.
Closing the Deal: Seal the deal with all the legal formalities and ensure a smooth transfer. This is the final lap—no shortcuts.
the Steps of buying / Selling
Once the buyer and the seller have indicated their interest, the process of buying and selling a business can be broken down into the follow steps.
Letter of Intent (LOI): This is like a promise ring before an engagement. It shows serious interest from the buyer but isn’t a final commitment. It sets out the deal's broad strokes and can include exclusivity to negotiate further. It is a preliminary guide for the rest of the transactions, and it keeps both parties in check and informed.
Non-Disclosure Agreements (NDAs): These are your secrecy vows. Both parties agree to keep the lips sealed on any sensitive info shared during the deal. For a buyer to purchase a company, the seller will need to disclose many confidential informations about their business. An NDA can protect the details of trade secrets, customer information, business models, and product reviews.
Due Diligence: This is the full-body checkup. It’s when the buyer inspects every nook and cranny of the business to ensure everything is as stated. No surprises shall arise after the purchase. Some basic aspects of inspection should be:
Financial Due Diligence:
Financial Statements: Examine the balance sheets, income statements, and cash flow statements for the past few years. It’s like checking the engine before buying a car.
Tax Compliance: Review past tax returns, ensure all taxes have been paid, and check for any ongoing audits or disputes.
Revenue and Profit Trends: Analyze revenue streams and profit margins. Are they consistent, growing, or volatile?
Legal Due Diligence:
Corporate Records: Ensure the business is in good standing. Review its articles of incorporation, bylaws, and any amendments.
Contracts and Leases: Scrutinize all existing contracts, including supplier agreements, leases, and customer contracts. You don’t want to inherit a bad deal, or buy a business only to realize the whole thing was built on handshake agreements.
Intellectual Property: Verify ownership of all IP rights, patents, trademarks, and copyrights. Make sure they’re not just valuable but also secure.
Negotiation: This is the art of the deal. Terms, price, conditions—everything is up for a tug-of-war until both sides find a middle ground they can shake hands on. Legal counsel and experts will be an especially strong asset in this process ot help you make your best case.
Closing: Once negotiations have concluded, it’s time to turn the keys over. While this is technically the end of the deal, a savvy business person will ensure that there are measures in place protecting themselves and their business, well after the closing date.
buying or selling a business?
Apex Corporate Law will help you draft and review all the paperwork (LOIs, NDAs, purchase agreements), guide you through due diligence, negotiate terms, and close the deal. Our trusted business lawyers will make sure you don’t step on any legal landmines, and help clinch the deal with your interests securely in place.