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Management buy outs often happen when a business owner wishes to retire or because a holding company wants to sell part of the business.
For the management team, this can provide a good succession strategy as the existing management team are a known quantity and the current owner can trust them with the business. This is important as the seller will often retain an interest in the company as a debt which is repaid over time. Lenders also look to this risk element when providing funds to ensure that all parties are invested in the future success of the business.
As the buying management team is already effectively running the business, the due diligence process is usually more limited than a usual share purchase (as the buyers already have full knowledge of the business). The seller usually only needs to give basic warranties to the management team as they often know as much about the business as the seller.
We will offer practical support and advice and aim to ensure a smooth transition from the current owner to the new management team. We can assist with all areas of the legal process and assist you, either as the management team buyer, or the seller. Our services include:
- Advise on the legal structure of the deal
- Due diligence process
- Share Purchase Agreements
- Security documentation (guarantees, debentures etc)
- Board Minutes and Shareholder Resolutions
- Service Agreements
- Articles of Association
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