Realising the benefits of a management buy-out or management buy-in
Whatever your role in an MBO or MBI, our team of corporate solicitors can support you with:
- Due diligence. Whether you’re a seller with questions to answer in relation to your business, a management team looking for funding and investigating a target business, or a private equity firm looking to finance a deal and undertake due diligence, we are geared up to make sure the process is as painless as possible.
- Disclosure. Whether you’re a seller looking to ensure that your disclosures are as accurate as possible to prevent any liability following the transaction, or a management team or private equity firm looking to ensure that the disclosure exercise is as robust and efficient as possible, we can guide and support you throughout the process.
- Structuring your MBO/MBI so it is as fair as possible to all parties and advising on the legal, financial and tax considerations of the deal.
- Advising on the best way to fund the deal, whether that be through debt, private equity or a combination of the two.
- Informing sellers of the best way to structure the deal, whether they remain as a shareholder after the transaction or not, and if they are to remain, drafting and advising on shareholder agreements and any other post-transaction documentation.
- Notifying MBO/MBI buyers on the commercial risks of the transaction, whether that be individual directors or the board as a whole.
- Preparing sale and purchase documents, negotiating with other parties and completing the deal with the minimum fuss and expense.
- Drafting key conditions such as representations, warranties, indemnities and restrictive covenants. The parties to an MBO or MBI need to know what is commercially reasonable in terms of these key parts of legal documentation to keep negotiations on track. That’s why you need an MBO/MBI law firm that completes deals regularly, so you know they’re up to date with what is currently ‘market’ in terms and conditions of sale.
- Advising on potentially contentious issues such as conflicts of interest and confidentiality, and providing solutions to these issues if they arise.
What our clients say
We pride ourselves on delivering an excellent service for clients, but don’t just take our word for it.
The support, advice and guidance from Harper James was absolutely vital. Shubhu, Callum and the team there were always on hand to deal with any issues that we needed help with as the deal progressed. This is an exciting new stage in the development of the business.
Our scale of growth would not have happened without the support of Harper James.
We use Harper James because they understand the venture capital sector we operate in, know our business inside out and are always on hand to assist us in any way we need.
My colleagues and I have found them to be adept at dealing with the variety of challenges facing early stage companies. They are a trusted source for sound, sensible advice and practical deal management.
Quite frankly I was stunned at the low cost of the service given the value it provided us.
Over the years Harper James have helped us navigate complex legal issues and red tape, providing distilled options and legal consultancy that far exceeds the service levels we’ve previously experienced from more traditional law firms. The team act like our own in-house counsel so, regardless of which lawyer we work with, we feel supported and that they truly have our best interests at heart.
For us, the support of Harper James Solicitors has been a gift. The collaboration we have had has been of tremendous importance. The service has been superb value for money.
Always great to have HJ on hand
Fundamentals of a Management Buy-Out or Buy-In
Understanding how to structure your MBO or MBI so that all parties (the management team, the seller and the bankers/investors) benefit while not over-burdening the target company with restrictive terms or debt is a complex matter. Whatever your role in the transaction, getting the right support from corporate solicitors means that you will avoid common pitfalls and achieve a swift transaction.
Working with you to understand the seller, the target company, the needs of management and the investment goals of funders, we will help you answer the following questions to ensure the long-term commercial success of the target company:
- Why is the seller leaving the business? Is this a retirement, or is part of the business being sold off?
- Have the assets and liabilities of the company been properly identified, including commercial premises, stock-in-trade, intellectual property (IPR), contracts with suppliers, indebtedness and issues such as employment disputes and litigation?
- Will any lending involved in the deal be secured by these assets?
- Has ownership of the IPR been clearly established and is the licensor confident that they have the right to license the IP? Can trading platforms and internet based IPR be efficiently transferred as part of the sale so the business can run smoothly?
- If you are an MBO buyout team, do you understand the motivations of the company’s owner, and is the relationship good?
- If this is an MBI, what kind of relationship with the seller have you established? What kind of questions do you need to ask to ensure that your investment is sound?
- How will you finance a purchase? Do you have investors on board, or will this form part of the deal process?
- If you’re an investor, what are you hoping for from the deal?
- Is there a business plan in place for the company following the buy-out? Will cash flow be sufficient to meet any additional indebtedness?
What are the benefits of a Management Buy-Out/Management Buy-In?
For a seller: divesting to a management group that will grow your company
If you’re a seller, we can make sure you derive maximum advantage from an MBO/MBI by making sure the deal remains confidential and working closely with your chosen management team. The best deals are achieved when both sides trust one another to negotiate fairly, and we pride ourselves on helping sellers achieve a good deal, leaving their company in good hands for the future.
For management teams: Get the opportunity to run your own business and achieve greater rewards for the hard work you put in as an employee
We can help you restructure the new company so that you achieve your buy-out goals, and draft the necessary documents like shareholders’ agreements so that your equity contributions provide yields in line with your aspirations as part of the overall MBO/MBI transaction. For MBIs, through the due diligence process, we can help you identify new markets and income streams that may not have been exploited by the target company.
For investors: Create new revenue streams
We help banks and investors structure debt and equity as part of MBO/MBI transactions, document the deal and arrange for any security in assets to be put in place. We also negotiate shareholders’ arrangements with the target and management team and advise on equity issues.
Who we help: Sellers, directors, management teams, private equity and venture capital firms
We support a wide range of UK-based clients who are looking to get involved in an MBO/MBI. We advise clients of all types, from individuals and early-stage businesses to long-established SMEs and large multi-nationals.
Why choose Harper James Solicitors?
We can assist you with all aspects of your management buy-out or management buy-in transaction, from due diligence through to completion.
Our corporate solicitors and finance solicitors have a wealth of experience in completing successful MBOs/MBIs and we are experienced in putting in place shareholder and management arrangements that enable a company that has been taken over to thrive and grow.
Plus, we have all been recruited from top 100 UK law firms or from large international businesses and have advised clients both as external advisors and as in-house corporate counsel. Find out more about the team here:
Abby Watson is a corporate solicitor, specialising in private equity investments, mergers & acquisitions, EMI share schemes, corporate finance and governance and more.View profile
Adam Kudryl is a Partner and Corporate & Commercial Solicitor at Harper James Solicitors, specialising in strategic investments, acquisitions and sales.View profile
Corporate Solicitor & CEO
Toby Harper is the CEO & Founder of Harper James Solicitors, as well as a corporate & commercial solicitor. He specialises in venture capital and the tech sector.View profile
Stephen is an experienced corporate lawyer, with a career including time at DLA Piper and Pinsent Masons. He specialises in mergers and acquisitions and private equity work.View profile
Jas is a corporate partner at Harper James Solicitors, advising on corporate governance, mergers & acquisitions, venture capital & investments.View profile
Shubhu specialises in early-stage fund raisings, shareholder arrangements and M&A. Prior to joining Harper James she worked at Mills & Reeve and before that at Addleshaw Goddard and Slaughter and May.View profile
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