Selling Your Business – Practical Tips for Sellers – Part 8: Pre-Closing Covenants and Conditions

This is part eight of our series discussing the sale of a business from the seller’s perspective.  We’ve covered deal structure issuesseller financing, earn-outs, letters of intent, due diligence, and the first two sections of the purchase agreement dealing with (i) major business points and (ii) representations, warranties, and disclosure schedules.  In this post, we’ll discuss the portion of the purchase agreement dealing with the period after the signing date and up until the closing. [Read more…]

Selling Your Business – Practical Tips for Sellers – Part 7: Representations, Warranties, and Disclosure Schedules

This is part seven of our series discussing the sale of a business from the seller’s perspective. We’ve covered deal structure issues, seller financing, earn-outs, letters of intent, due diligence, and the first section of the purchase agreement dealing with major business points. In this post, we’ll discuss the seller’s representations and warranties and the related disclosure schedules to the purchase agreement. Lawyers frequently debate the subtle and esoteric differences between “representations” and “warranties”, but for our purposes, in this post, they are basically statements that the parties make about themselves and their businesses, and we’ll refer to them simply as “representations”. [Read more…]

Selling Your Business – Practical Tips for Sellers – Part 6: The Purchase Agreement

This is part six of our series discussing the sale of a business from the seller’s perspective.  We’ve covered deal structure issuesseller financing, earn-outs, letters of intent, and due diligence.  In this post, we’ll begin discussing the primary definitive deal document, the purchase agreement. [Read more…]

Selling Your Business – Practical Tips for Sellers – Part 5: Due Diligence

This post was jointly written by Jennifer Wilson and Casey W. Riggs.

This is the fifth in a series of posts discussing the sale of a business from the seller’s perspective. In the first four posts, we provided an introduction to this series and discussed asset versus stock sales, seller financing, earn-outs, and letters of intent. In this fifth post, we’ll discuss the beginning of the deal process (after signing of the LOI), which typically begins with a comprehensive review of the seller’s business by the buyer (generally referred to by those in the M&A industry as simply “due diligence”).[1] [Read more…]

Selling Your Business – Practical Tips for Sellers – Part 4: Letters of Intent

This is the fourth in a series of posts discussing the sale of a business from the seller’s perspective. In the first three posts, we provided an introduction to this series and discussed asset versus stock sales, seller financing, and earn-outs. In this fourth post, we’re moving away from deal structure issues and into the deal process itself, starting with letters of intent, or “LOIs” (also known as “term sheets”).

We’ve previously written about LOIs from the point of view a buyer of a business and recommended that a lawyer be engaged at the LOI stage. However, in this post we want to discuss some of the important points from the perspective of a seller of a business. Here are four tips for sellers in negotiating the LOI followed by a list of items sellers might consider including in the LOI. [Read more…]