{"id":6245,"date":"2012-04-27T13:54:25","date_gmt":"2012-04-27T13:54:25","guid":{"rendered":"https:\/\/gregorydamy.niceavocats.fr\/?p=6245"},"modified":"2023-08-09T09:27:29","modified_gmt":"2023-08-09T09:27:29","slug":"external-growth-operations-good-to-know","status":"publish","type":"post","link":"https:\/\/gregorydamy.niceavocats.fr\/en\/external-growth-operations-good-to-know\/","title":{"rendered":"External growth operations: good to know"},"content":{"rendered":"

[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.19.5″ custom_margin=”||0px||false|false” custom_padding=”||0px||false|false” locked=”off” global_colors_info=”{}”][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”4.19.5″ _module_preset=”default” background_enable_mask_style=”on” background_mask_style=”wave” background_mask_color=”rgba(0,0,0,0.08)” custom_padding=”||6px|||” locked=”off” global_colors_info=”{}”][et_pb_column type=”1_3″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_circle_counter title=”Estimated reading time (in minutes)” number=”2″ percent_sign=”off” _builder_version=”4.20.2″ _module_preset=”default” title_font=”Amiri||||||||” max_width=”137px” global_colors_info=”{}”][\/et_pb_circle_counter][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.19.5″ _module_preset=”default” custom_margin=”||0px||false|false” custom_padding=”||0px||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][et_pb_divider _builder_version=”4.19.5″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][\/et_pb_column][\/et_pb_row][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/gregorydamy.niceavocats.fr\/wp-content\/uploads\/2012\/04\/business-7111764_1280-2.jpg” title_text=”business-7111764_1280-2″ _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][et_pb_text admin_label=”Text” _builder_version=”4.21.0″ text_font=”Amiri||||||||” header_2_font=”Amiri||||||||” header_3_font=”Amiri||||||||” background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n

\n

External growth operations are complex and sometimes risky processes.\u00a0Here are the points to keep in mind before you start.<\/span><\/p>\n

What is the nature of the operation?<\/span><\/span>
<\/strong><\/h2>\n

There are several types of external growth, acquisition or disposal\u00a0<\/span>operation<\/span><\/a>\u00a0.\u00a0At least three questions must be asked, in order to specify the economic purpose of the operation:<\/span>
\u2013 Is it a takeover operation or is it a minority operation?<\/span>
\u2013 Is it a question of buying securities or buying a business as a goodwill?<\/span>
\u2013 Is the remuneration in euros or in securities?<\/span>
These elements are very important because they will condition the structure of the operation and have a very strong influence on the negotiation process.<\/span><\/p>\n

\u00a0Choosing the right procedure<\/span><\/strong><\/h2>\n

Acquisition or disposal operations are long processes that can be more or less complex depending on the nature of the operation.\u00a0In summary, a majority operation is generally less complex to implement than a partnership.\u00a0A transfer of title is also easier to carry out than a transfer of activity or goodwill.\u00a0Finally, an operation against cash is also generally simpler to implement than an operation remunerated by securities.\u00a0The key to success in this type of operation will be to fully understand upstream the issues of structuring and implementation on a legal, financial, tax or social level.\u00a0In a word, you have to anticipate.<\/span><\/p>\n

\u00a0The pitfalls to avoid for the buyer:<\/span><\/strong><\/h2>\n

For the buyer, the main pitfall to avoid is having overvalued the property acquired.\u00a0Therefore, valuation must be done properly.\u00a0A valuation is based on two points: the profitability analysis of the operation, to be assessed from a financial point of view, but also according to the intangible value of the property (ownership of brands, ownership of real estate assets, etc.).\u00a0The valuation is also based on the absence of major risks such as major litigation or a significant social risk.\u00a0These valuations are subject to due diligence, also called \u201cacquisition audits\u201d.\u00a0These are used to validate profitability assumptions and identify risks.<\/span><\/p>\n

 <\/p>\n

Liability guarantee<\/span>
<\/strong><\/h2>\n

The law offers a purchaser minimum guarantees that will allow him, if he made a mistake or has been deceived, to request compensation, or even the cancellation of the operation.\u00a0These guarantees are sometimes difficult to implement.\u00a0Practice has therefore developed other forms of contractual guarantees, called \u201cguarantees of assets and liabilities\u201d.\u00a0These consist of specifying for the seller the consistency of the activity sold, and ensuring that the operations comply with the law, and that there are no significant liabilities.\u00a0It is also a compensation mechanism, which will provide for a guarantee period and a maximum limit of liability.\u00a0The last mechanism is called the \u201cguarantee of the guarantee\u201d, which ensures the effective payment by a third party, a bank for example, in the event of this liability guarantee being called into play.<\/span><\/p>\n

 <\/p>\n

The challenges for the seller<\/span>
<\/strong><\/h2>\n

The main pitfall for a seller is overconfidence in the potential of the company he wishes to sell or whose capital he wishes to open up.\u00a0In a logic of anticipation, the seller will have to make an objective overview of the financial, legal, fiscal, social and strategic situation of his company, preferably with the assistance of external advisers.\u00a0In addition, he will have to \u201cdress the bride\u201d, in other words, give his company the most favorable image possible.\u00a0He may, for example, correct the irregularities identified during the inventory phase.\u00a0And finally, work upstream on the structuring of the operation to present the simplest possible sales plan for the buyer.\u00a0This is how a seller can maximize the valuation in a sale transaction.<\/span><\/p>\n

DAMY Law Firm<\/span><\/a>\u00a0, Nice, Company Law, Update 2022<\/span><\/p>\n<\/div>\n

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External growth operations are complex and sometimes risky processes.\u00a0Here are the points to keep in mind before you start. What is the nature of the operation? There are several types of external growth, acquisition or disposal\u00a0operation\u00a0.\u00a0At least three questions must be asked, in order to specify the economic purpose of the operation:\u2013 Is it a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[286,295,288],"tags":[],"class_list":["post-6245","post","type-post","status-publish","format-standard","hentry","category-autres","category-commercial-and-company-law","category-other"],"yoast_head":"\nExternal growth operations: good to know - Soci\u00e9t\u00e9 d'avocats Damy<\/title>\n<meta name=\"description\" content=\"External growth operations: good to know External growth operations are complex and sometimes risky processes.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gregorydamy.niceavocats.fr\/en\/external-growth-operations-good-to-know\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"External growth operations: good to know - 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