At first glance, a company purchase – as the term implies – is based on a purchase agreement. Nevertheless, completing an entire company purchase, or a share of one, is not quite that simple. When purchasing, it is important to locate the right target, but when it comes to selling, it’s all about achieving the right price. This is why the Mergers & Acquisitions (M&A) Team at Viehbacher law firm will be right by your side through all stages of the purchase, from the Letter of Intent, through signing and closing, to the successful completion of the post-merger phase.
- Choosing the right target
- Asset Deals
- Share Deals
- Equity Participation
- Management Buy-Outs
- From the Letter of Intent to Due Diligence
- Business valuations – determining the right purchase price
- Important to note – related areas of law
1. Choosing the right target
When it comes to a company purchase, choosing the right acquisition object is essential. Underpinning the following considerations is an analysis of goals. Which company is a good fit for your expansion strategy? What expertise do you need to acquire? Where should the target company be located and what relevance do all these answers have for the existing company? Our lawyers will be by your side from the moment you first consider developing a sound acquisition strategy and will search with you to find the most suitable target for your objectives. We will gladly negotiate on-site with your future contractual partners.
2. Asset Deals
DA company purchase is dependent upon the general statutory provisions applicable to the contract of sale, but planning is all about the finer details. If a whole company is purchased, then an asset deal is normally put in place where the contracting parties agree on the conveyance or purchase of tangible assets. An asset deal may also include the real estate upon which the company is located.
3. Share Deals
Share deals are different from asset deals. In a share deal, shares in a company are transferred from one person to another. Our lawyers will take care of the deal management, provide advice on the appropriate form of transaction, and ensure they are abreast of any particularly significant aspects from other areas of law, such as competition law, labour law, and tax law.
4. Equity Participation
Equity participation in a company can be in the form of the acquisition of shares or a contribution in kind. The particularities of the transaction are predominantly related to the amount of the share acquisition or the expertise or technology made available by the parties to the transaction. The size of the equity participation is in turn dependent on the motive for participation. Is the reason for participation simply about making an investment, or is it about a common business goal? Our lawyers, based at offices in Germany, Austria, Liechtenstein, Switzerland and Italy, specialise in analysing these motives and finding the appropriate equity participation solution, depending on the corporate business structure.
A merger extends beyond a mere company purchase or company sale insofar as, from the outset, the intention is for two previously separate companies to completely merge. In legal terms, a merger such as this depends on the applicable law relating to the right to change the legal structure of a business.
A subtype of a company purchase or company sale is the so-called Management Buy-Out (MBO). With an MBO, the former management acquires the company, whether as an asset deal or a share deal. Our firm's lawyers are experts in this type of transaction with a proven track record in succession issues.
7. From the Letter of Intent to Due Diligence
The decision on the transaction, documented by the Letter of Intent, follows a process of due diligence. During the process, our lawyers analyse the companies with regard to existing liabilities and carefully consider the contractual relationship with any subcontractors, distributors or employees. In terms of fiscal due diligence, we scrutinise any tax obligations.
8. Business valuations – determining the right purchase price
Aus der Due Diligence ergeben sich die Eckdaten eines Unternehmens: Verbindlichkeiten, Betriebsrenten, die Kapitalstruktur, Patente und Risiken sind nur einige der Aspekte, die für die Bewertung eines Unternehmens und damit für die Kaufpreisermittlung relevant sind. Unsere Rechtsanwälte arbeiten eng mit unseren Steuerberatern und bei Bedarf mit weiteren Institutionen wie Banken oder Wirtschaftsprüfern zusammen. Auf diese Weise gelingt es unseren Mandanten, den treffenden Kaufpreis für ihr Target zu ermitteln.
9. Important to note – related areas of law
In addition to our experience with corporate transactions, we can offer a high level of expertise in other fields of law that can be crucial in a transaction. In addition to tax legislation, we are also experienced in commercial law, intellectual property law and labour law.
10. Post-Merger Integration
Even once the contract of sale is signed and completed, the deal is by no means over. Our lawyers will ensure the smooth handling of the payment of the company purchase price and will also support you with post-merger integration – the actual merging of the companies. This covers the harmonisation of company principles from the viewpoint of company law and labour law, as well as the practicalities of merging the workforce and production operations.
As experts in company purchases, company sales and equity participation, we are ready to work with you. Get in touch!