The collaborative role in business sales

By Tim Field, Birkett Long.
Collaborative working might not spring to mind when thinking about corporate lawyers. However, the reality is that much of my time is spent working with other people within my firm and a range of external professionals.

Published in UK Director Magazines Spring 24

Legal:
Tim Field,
Birkett Long

A typical business sale or acquisition is only possible with the assistance of others. From accountants to corporate financiers, real estate specialists to financial advisers, ensuring that all parties are coordinated and working together is crucial to being a commercial lawyer. 

Where to Start

Those looking to sell their business will often ask what the process is and where to start. The first step would be a discussion with their accountant to assess the potential value of the business and ensure that all books and records are up to date.

In conjunction with this, a potential seller should speak to an agent who can undertake the necessary marketing and assist with valuation. At this stage, the lawyer will often consider and prepare confidentiality agreements and heads of terms (a non-binding document that outlines the main points of the contract) designed to protect the seller’s interests and ensure that everyone involved understands the key terms of the proposed sale.

Due Diligence

Once heads of terms are agreed, the buyer will usually undertake a period of due diligence. Depending upon the nature of the target business, there may be a need for specialist consultants -from health and safety auditors to software and IT specialists.  

As due diligence progresses, bankers may also become involved to assist with funding the acquisition or discharging existing loans and debts. Each institution will have different requirements and may appoint its own lawyers to ensure that its interests are protected. 

Collaboration is Key

While I have worked with many parties involved in a business sale, a host of lawyers from commercial real estate, employment, Intellectual Property and regulatory can also be involved. One lawyer must coordinate the entire process and be aware of the progress of each team to meet timelines and budgets.

With so many parties involved, it is beneficial when the lawyers and other professionals take a collaborative approach. Unnecessary obstacles can lead to delays, additional costs and unhappy clients. While there is an overriding objective to act in a client’s best interests and achieve the best outcome, most clients selling a business want it sold and that should be the focus of the parties.

Pros and Cons

We offer a pragmatic approach to advising our clients, highlighting the benefits and drawbacks of different negotiating strategies and the impact of drafting changes made by the other side in a transaction. Understanding our client’s main objectives, their business, and the potential risks is key to providing the right guidance.

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Get in Touch

Tim Field is a Partner and Leader of The Business Team at Birkett Long.
T: 01206 217366
E: tim.field@birkettlong.co.uk
Or visit www.birkettlong.co.uk

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