M&A could occur when either one company seeks to buy another one outright (an acquisition) or two companies agree to come together and combine their operations (a merger). An acquisition can be an indication that the company doing the buying is profitable and doing well.

In contrast, in some cases two companies coming together (a merger) may be an indication that both are struggling financially, or are finding market conditions challenging. This isn’t always the case but is worth considering. A merger can also be a way for a company to grow and expand while eradicating a competitor.

Both publicly listed and private companies may be involved in M&A activity. The purpose may also be to add new ranges to an existing group of products or services.

• Drafting and negotiating the agreements. This will involve many parties including both businesses, the other legal team plus any external financial advisors.
• Due diligence. This is a vital part of the process and allows information to be gathered to check if there are any hidden liabilities or issues that need to be considered.
• Organising the financing by liaising with banks and finance firms.
• Completing the transaction.
• Ensuring that all post-completion regulatory activity and registrations are finalised.

We have specialist knowledge in M&A transactions and can provide support for the whole process from enquiry through to completion.

What are heads of terms?

Heads of Terms or Letter of Intent essentially set out the main terms of a corporate deal. The Heads of Terms will include for example, sale price, what assets are included, who the seller and the purchaser are and any other key terms. They may be drawn up by the selling agent, or one of the parties’ solicitors. Heads of Terms are commonly agreed and signed by both parties. It is strongly advised to seek legal advice before signing.

What is a disclosure letter?

The Disclosure Letter is a key document in any company sale or purchase. It is the seller’s opportunity to make ‘disclosures’ against the warranties which the buyer will require the seller to give. If a seller makes inadequate disclosures, it may face breach of warranty claims, which could allow the buyer to recoup some or even all of the purchase price.

The Disclosure Letter usually takes the form of a letter from the seller to the buyer. It is prepared by the seller’s solicitors. It is usually divided into two parts: general disclosures and specific disclosures and will have attached to it copies of the documents being disclosed to the buyer (the disclosure bundle).

General disclosures cover certain matters that appear in public records and/or of which the buyer ought to be aware on the basis of pre-contract enquiries or searches actually made, or which a buyer would normally make. The general disclosures are often the subject of substantial negotiation between the buyer and the seller’s solicitors.

Specific disclosures are the seller’s opportunity to specifically disclose actual matters which, if not disclosed, would constitute a breach of warranty. The specific disclosures are made by reference to the warranties themselves. For example, if there is a warranty within the sale agreement that the target company is not a party to any litigation, the seller would need to disclose full details of any current litigation affecting the company. Also, certain warranties may require specific information to be listed in the Disclosure Letter or included in the disclosure bundle (such as material contracts, pension schemes, etc).

What are warranties and indemnities?

Warranties are contractual statements, usually contained in an agreement, as to the condition of the target company or business. They are usually contained in a separate schedule to the agreement.

Indemnities are promises by the seller to make good any potential losses that may be incurred by the buyer in certain circumstances.

What is the difference between an asset and share acquisition?

If shares in a company are purchased, all its assets, liabilities and obligations are acquired (even those that the buyer does not know about). If assets are purchased, only the assets (and liabilities) which the buyer agrees to obtain and which are identified are acquired.

The other key commercial difference between the two transactions is in the nature of what the buyer acquires: on a share purchase it acquires a company owning a business and running it as a going concern (subject to any change of control provisions). In contrast, an asset purchase will not automatically transfer contracts (other than employment contracts in a relevant transfer) or existing trading arrangements to the buyer.

What is a joint venture?

A joint venture is a commercial arrangement between two or more participants who agree to co-operate to achieve a particular objective. Joint ventures cover a wide range of collaborative business arrangements which involve differing degrees of integration and which may be for a fixed or indefinite duration.

Why enter into a joint venture?

There are many reasons why a business may seek a joint venture partner. It may wish to expand, develop new products or markets or grow returns from existing ones. It may be looking to tap into a partner’s greater or more specialised expertise or resources or to share the costs and risks associated with developing new markets or technologies.

What is an EMI scheme?

Enterprise Management Incentives (EMIs) are employee share options under which companies can grant rights to their employees to acquire its shares on a highly tax efficient basis for both the employer and participating employees.

EMI can form a tax efficient part of a company’s succession planning (bringing selected key employees through to have a stake in the business) or be used as a pure incentive arrangement.

There are certain requirements which must be met by both the company and the employee in order for options to qualify as EMI options such as the employee working at least 25 hours a week. Carter Bond Solicitors are happy to advise you further on the requirements.

Many ask us ‘what’s different about you?’ and we like to reply, ‘because we go the extra mile’. We see our work as building and maintaining good business relationships rather than just earning fees. How we do this is by keeping in constant contact with our clients and intermediaries. From pre to post instruction we ensure that our clients are informed of all legal issues that may impact their business and therefore lives. That is why we provide daily or weekly updates to ALL of our clients whether there is anything to tell them or not (we don’t charge for this we just see it as part of our service). We like our clients to rest peacefully knowing that when we are instructed, and we say ‘we will take it from here’ they know we mean it.

The world is changing, and many individuals are realising that lifestyle is as vital to them as is income. We are the lucky ones who can hand pick lawyers who can provide the best quality advice but at outer city costs. Our offices are in North West London which may not be the most salubrious in the market but at the same time this allows us to charge our clients for what they pay for, our advice NOT our office space.

ALL our lawyers have previously worked in large city-based law firms and continue to practise and offer  the same high level service  they provided to clients in the City but without the pressure and demands often dictated by City law firm. This allows us to be competitive on our fees without compromising our service.

All in all, our clients win, which is the way we like it.

All our clients benefit from the same high level of care and attention whether the instruction is big or small. At the outset of each matter, we discuss the entire process with our clients, including the costs, potential outcomes and issues associated. This is to ensure clients are fully aware, knowledgeable and are in control always. Supporting and ensuring we provide the highest level of services, we offer our constant contact process with the partner or barrister leading  your file, a document log in for matters which are for larger and more complicated instructions and on-going support post transaction should our clients require it. Our aim is not just to get the work done, but to make our clients’ lives easier as we do it, which is why we ensure that our clients have regular access to the resources they need from us.