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The acquisition of a company involves distinguishing between different fundamental stages. It is necessary to have prepared your acquisition project before embarking on the takeover and also to study the situation of the company well.
Prepare and define your acquisition project:
Before the start of any operational phase, the buyer must imperatively engage in a reflection on his motivations and the objectives of this operation. Indeed, the professional and personal diagnosis is an essential prerequisite for properly defining the project and presenting it in a reasoned and convincing manner to the seller and the bank. It is necessary to check that the project is realistic with regard to the professional and financial capacities of the buyer.
Obtain the fundamental documents:
You should ask the seller to provide you with various documents about the company: accounting, financial and legal documents. You will have to analyze them with the help of professionals in order to form an initial opinion on the real situation of the company. This phase is fundamental since it can highlight certain difficulties, particularly financial ones. The assignor must also be involved in the negotiation process and the intentions of each party must be contractualized through a joint letter of intent.
Carry out an in-depth study of the company:
A number of analyzes must be carried out to properly assess the company’s situation. Audits can make it possible to validate the reality of the figures and information communicated to highlight the regulatory, tax, social and economic risks that must be known to the buyer. You also have to ask yourself the right questions: is the company dependent on the seller or not? Is the price consistent with current and future profitability? Will the key people stay after the sale of the company? What is the scope of the recovery?
The different legal and financial arrangements:
Buying out a business can be done in two ways. It is possible to buy back a goodwill, that is to say that the buyer buys back the clientele, the right to the lease and the transfer of the employees. In this case, the buyer buys only the assets and none of the liabilities, that is to say the debts of the seller. It is also possible to redeem the shares or shares of a company. In this case, the buyer buys the clientele, the right to the lease and the transfer of the employees, but also the debts which appear on the balance sheet but also the possible debts which do not appear on the balance sheet and are not known on the day of the sale.
Completion of the sale:
During the negotiations, all the elements of the agreement between the parties must be checked: price, terms of payment, scope of the takeover, support for the seller following the sale and retention of the main employees of the company. It is important to properly record all these elements in the deeds of sale: deed of transfer and additional deeds.
DAMY Law Firm, Nice, Update 2022