Mergers & Acquisitions

Heads of Agreement Negotiated

Once an acquisition has been identified and a client wishes to consider the acquisition, Business Angels will negotiate terms for the purchase, in liaison with its client and then prepare a Heads of Agreement Document. Clearly the terms of the acquisition are the most sensitive areas of a purchase and bringing this to a successful conclusion is a specialist area of Business Angels. Once the Heads have been agreed both parties will proceed to Due Diligence, however we would always recommend certain areas of the legal works are clarified prior to Due Diligence commencing. Warranties should always be taken from the Vendor, and it is this area of the legal contract where negotiations can determine the success or failure of the acquisition. Items that often cause difficulties are transferring of banking arrangements where borrowing has been secured but with security given outside of the Vendor Company (charge over a Directors house or the Vendors commercial property that could be held in Pension Fund to be retained by the Vendor) – clearly these matters need to clarified with lenders prior to costs being incurred on a legal contract. Costs are always an area that needs monitoring, for until completion day the acquisition can always fail to complete. From a Client’s perspective Business Angels will follow the most cost effective path to ensure completion at minimal costs.