Buying Other Businesses

A really fast way of expanding can be to simply buy another business; be that a local competitor, or a business doing similar things in a different location.

When one business buys another, there are many legal, financial, and operational factors to consider.

Due Diligence

Before buying, you or your representatives should investigate the target business thoroughly. Your accountant should scrutinise the profit & loss statements, cash flow, debts, tax records, assets and liabilities.

After that, we can help to scrutinise any existing contracts, leases, supplier/customer agreements, & licences. We can advise on whether the company you want to buy has been complying with regulatory issues, and has the necessary permits for the work it carries out. It is also important to carefully consider the staffing contracts, pension position, and any forthcoming redundancies and ongoing employment disputes. The last thing you would need is buy a business, only to find that there are immediately large and expensive problems to deal with.

Should you buy the whole thing, lock stock and barrel, or cherry pick the bits you want?

Then the fun starts! There will need to be a sale and purchase agreement, warranties and indemnities, negotiation about non-competition clauses, the proper transfer of employees, agreements over intellectual property and branding, for starters. But don’t worry - we can handle all of this, leaving you free to work out how to keep the larger business profitable.

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Once all of that has been done, your accountant and you can work out what a fair price for the business is, and what payment terms you can offer.

Hopefully, then an agreement can be reached. At this stage, it is down to us to advise on the legal structure the purchase should take.