Assynt Corporate Finance, a member of The Corporate Finance Network in Hertfordshire, has advised a family-run manufacturing business on its sale to another company. 

Andrew Watkin (pictured), a business adviser at Assynt Corporate Finance was asked by the Executive Director of a manufacturing business to explore sale options for the entire share capital of the company.

Andrew began by undertaking research to identify potential buyers across the UK and internationally. Once the process was live, several parties expressed an interest and signed confidentiality agreements. Information Memorandums were distributed to the prospective buyers and meetings were held between management of both respective parties. An offer was revived however was rejected by the vendor.

After a period of time, a similar business known to the client made an approach and expressed an interest in acquiring the business. Like the client, they were also keen to complete the acquisition as soon as possible. From the sellers point of view, this was due to the rumor of capital gains tax rules changing on 3rd March 2021. For that reason, the transaction needed to be completed in a matter of weeks, not months.

The principles agreed on the price for the shares while Andrew drafted and negotiated Heads of Terms including financial aspects of the transition such as interest and deferred consideration.

During the drafting of the Share Purchase Agreement (SPA) the buyer’s solicitor had added and excluded certain points not agreed to in the Head’s of Terms. Whilst Heads of Terms can be considered to be an evolving document over the course of a sale process, the SPA should reflect the main points agreed to by both parties. Subsequently, the SPA was amended to include all major points agreed between the principals in the first place while other minor amendments were made as required by the Principals in the SPA. This was crucial to achieving the required deadline.

The disposal was completed on 1st March 2021 with the sale of the entire share capital of the manufacturing business. The vendor has continued to maintain the accounting records during the handover period and all operational matters have been passed over to the new owners.

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Categories: Deals

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