Overview
Our client was the UK parent of a UK subsidiary. The subsidiary was to be sold to employees of the business. The deal had to be completed in the three week period over Christmas.
Context and Challenge
The main challenge was to complete the transaction from start to finish over a three week period. We had to liaise with individuals in very different time zones as well as in the UK so the work was intense and involved several late nights. There was a cut off point by which completion had to happen.
As it was employees of the subsidiary that were buying the business (by share purchase) this made things easier because they knew the business. On the other hand the transaction was not simple. Our client wanted to secure the consideration payments by taking security over certain of the assets of the subsidiary and we also had to resolve certain IP issues.
Process and Insight
We began by taking time to understand our client’s position, the rationale for the hard completion date and the risk profile generally.
Having understood the position and what our client wanted to achieve we were able to simplify the head of terms that our client and the purchasers had agreed and in doing so this made it easier to achieve completion within the ambitious time frame.
Once everyone was aligned on the form of the deal we then drafted all of the documentation that was needed. For various reasons we had to draft the share purchase agreement on the basis of a split exchange and completion.
Solution
We drafted and negotiated the share purchase agreement, various security documents (including a guarantee and a charge over book debts), IPR assignments and all the ancillary documents such as board minutes for both entities, stock transfer forms, agendas, PSC notices and resignation letters.
By helping both parties simplify some of the post completion arrangements we were able to help get the transaction done within the required timeframe.
Results
The transaction completed on time and there were no issues post completion in 2019.
