Acquisition Of An Engineering Company In The Midlands

The Transaction

Tom Charteress and the Wilson Browne team advised on the successful acquisition of an engineering company based in Coventry. The company had been active and established since the 1950s and had built up a successful and reliable reputation across the Midlands.

The Challenge

Share acquisitions involve several moving parts. The negotiation of key documents such as the Share Purchase Agreement, can involve technical discussion around the purchase price mechanism, as well as the negotiation around the warranties given under the agreement. Furthermore, the sellers have the option to disclose against those warranties, and such disclosures can affect the buyer’s appetite to move forwards with the acquisition.
It is vital to ensure that legal due diligence lines up with any tax or financials due diligence so as to maintain the momentum of the transaction, especially when working towards tight timescales.

The Approach

Tom worked closely with the buyer’s tax advisors to ensure that all issues were dealt with within the documentation and that the transaction was structured appropriately. Clear and detailed advice was provided throughout the acquisition, and documentation was drafted efficiently and accurately.

By adopting an approach which involved clear communication with all advisors and the client, Tom was able to push the matter through to completion in order to meet with the end of month deadline.

The Outcome

The acquisition was completed successfully, enabling the buyer to take control and run the company from September onwards, and ensured that all funding deadlines were met on time.

Tom Charteress, Solicitor in Wilson Browne’s Corporate team, said:

I was over the moon to help the client acquire the target company within the set deadlines and ensure a smooth transition for all parties. There were a few curve balls along the way, but it was nothing that couldn’t get resolved, and working with the client’s tax advisor to help resolve these issues was a pleasure. I wish the buyer the best of luck in the running of their new company.

Top Tips for Share Buybacks

• Instruct lawyers early: an issue that may crop up which can be planned for is time. Instructing legal professionals early on in the process can ensure that all parties have time to ensure that all aspects of the transaction are explored, with no stone unturned.
• Due Diligence: there are three key areas that this covers; Tax, Financial and Legal. Try not to underestimate the importance of each area and the level of detailed required.
• Funding: a key aspect of the acquisition is how you are going to finance it. Delays can occur if funding isn’t sought in time, so this ought to be done prior to the commencement of due diligence.
• Work collaboratively: share acquisitions usually involve accountants, tax advisers, shareholders and solicitors, and good communication between all is vital for a smooth transaction.

Wilson Browne’s nationally recognised Corporate team, ranked in The Legal 500, advises businesses on a wide range of corporate transactions, including company sales and acquisitions, management buyouts, company restructurings, corporate governance, franchising, intellectual property protection and commercial contracts.