Buying and Selling Businesses
Frank N. Lago, Esq. and BACC have helped clients purchase and sell millions of dollars in businesses in Tampa, Florida and beyond. BACC can help buyers and sellers in any state or country. BACC has assisted on a variety of deals including large and small dollar amounts, all cash and financed, stock and asset deals. BACC has seen it all and helped its clients mitigate risk in the transaction, but most importantly helped get the deal done right, specifically focused on the client’s needs. Buying/selling a business is a huge decision and having BACC on your team can help with your due diligence and decision-making process. Samples of what BACC can do for you are i) drafting letters of intent to begin the due diligence process, ii) drafting deal documents including purchase agreements, non-complete agreements and finance agreements and iii) closing the deal by exchanging documents and money in a safe and secure manner.
Generally speaking most deals start with a letter of intent (“LOI”) or memorandum of understanding (“MOU”), where the parties set out the purchase price, how due diligence will work, how the parties will work together, how to proceed to closing or terminating the agreement, exclusivity, and a timeline for closing.
Once the LOI/MOU is complete, the deal usually proceeds to due diligence, where the Buyer gets to look under the hood and see what’s really going on in the business. This includes looking at financials, tax data, employment data, sales, income, etc., enough so that the Buyer is comfortable completing the deal. Sometimes, the deal proceeds from LOI/MOU stage to an Asset Purchase Agreement (“APA”) or Stock Purchase Agreement (“SPA”) between the parties which provides for the due diligence period and how to proceed to closing.
Either the deal proceeds from LOI/MOU -> APA -> Closing or it proceeds from LOI/MOU -> Due Diligence -> Closing.
Closings usually takes place in either the attorney’s office, for BACC that would be in Tampa, Florida or virtually. At Closing, you will sign several agreements, which may include, but not limited to: APA/SPA, as applicable, Bill of Sale, Stock Transfer Power, intellectual/intangible property assignment, further assurances agreement, non-competition agreement and a consulting agreement. The Buyer usually wires the funds for closing just prior to the date of closing and on the closing date, the parties exchange signed documents, ink or electric, and the funds are transferred to the Seller.
This post makes it look deceptively easy however, I assure you, it’s best to have an attorney on your side to review or draft the documents for you or at the very least employ an attorney to act as a “neutral closer.” A neutral closer provides the basic documents necessary to transfer the assets or the stock to the buyer. While they do NOT represent either party, at the very least you receive the documents which memorialized the transaction. Proceeding without such documentation can be hazardous.