Expert: Alex Canham, Partner, Herrington Carmichael Facilitator: Roderic Rennison, Partner, The Catalysts LLP
Headlines:
- For a sale to be successful, there needs to be an alignment of interests
- To get the best outcome from the selling process:
- Prepare in good time before a sale
- Appoint professional advisers in good time
- Conduct reverse due diligence on the acquirer
Context:
Alignment of interests:
- What are the seller’s “red lines”?
- Who are they selling to?
- What is the acquirer buying? (Assets or shares?)
- What are the acquirer’s plans for the business?
Clarity of terms:
- How will the price be calculated – and (potentially) adjusted?
- How will the terms be recorded?
- What are the seller’s obligations after the sale?
Key considerations on exit:
- What are the legal risks for me as a seller?
- Advice and regulatory compliance
- The role of consumer Duty
- Warranties and Indemnities
Other key considerations on exit:
- Deferred consideration – “visibility and control”
- Have sight of the accounts and other documents
- Right to dispute
- Controls
- Security
- Preparatory work
- Proactive due diligence
- Secure key advisers
- Manage client expectations
Limitations on liability:
- The role of Professional Indemnity Insurance
- Time Periods
Key takeaways:
- Prepare and know what your “redlines” are
- Proactively audit your business
- Ensure certainty on price and adjustments
- Capped liability and control during the deferred period
