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Richard Phillips presenting at The IOD on 11 October 2012

Richard Phillips presenting at The IOD on 11 October 2012. Buying & Selling Private Companies. Richard Phillips Partner, Corporate Team. Overview. Preparation Finalising the deal What the process involves What each party requires and why Spanners in the works. Preparation. Start now

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Richard Phillips presenting at The IOD on 11 October 2012

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  1. Richard Phillips presenting at The IOD on 11 October 2012

  2. Buying & Selling Private Companies Richard Phillips Partner, Corporate Team

  3. Overview • Preparation • Finalising the deal • What the process involves • What each party requires and why • Spanners in the works

  4. Preparation • Start now • Ducks in a row… • Worthwhile to the Seller • Smoother deal for the Buyer • Funding – banks/private equity/capital markets • What type of deal – selling/buying shares or selling/buying assets? • The difference • Liability • Contracts • Employees • What will your lawyer need to do differently?

  5. Finalising the deal • Heads of Terms • Confidentiality • Exclusivity • Costs protection • Realistic timeframe

  6. What the Process involves • Due diligence and information gathering • Documentation: • To reflect commercial deal • To allocate risk between parties • Negotiation/meetings • Finance aspects • Dealing with employees • TUPE • Due diligence • Final documentation will be the deal – not things said/done before • Time commitments

  7. What each party requires and why • Buyer – protections • Warranties • Indemnities • Retention • Completion accounts • Restrictive covenants • Deferred consideration – and earn out? • Seller – security and defence • As much risk free money as possible? • Greater potential sum but more risk? • Security for deferred consideration • Disclosures and limitations on warranties

  8. Spanners in the works (1) • Gulf in risk allocation • Awkward other party • Awkward other lawyer • Relative size/sophistication of Buyer & Seller

  9. Spanners in the works (2) • Buyer is from another jurisdiction • Third party difficulties • Landlord • Financiers • Change of control • Your Advisors • From left field…

  10. Summary • Take advice early • Understand your own limits on risk and plan tactics accordingly • Understand the other party • Be pragmatic • Time commitments • Anticipate problems

  11. Contact Richard Phillips Partner, Corporate Team E: richard.phillips@mablaw.com T: 020 7842 3335 Matthew Arnold & Baldwin LLP - Solicitors 85 Fleet Street, London, EC4Y 1AE 21 Station Road, Watford WD17 1HT E: info@mablaw.com W: www.mablaw.com

  12. These slides have been produced only for the purposes of illustrating a talk given by Richard Phillips on 11 October 2012. They are not intended to be relied upon by any party and cannot constitute advice. Matthew Arnold & Baldwin LLP cannot be responsible in any way for any material contained herein.

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