Ten Commandments of Business Acquisitions pt. 9
Breaking It Down: The Ninth of the Ten Commandments of Business Acquisitions
Our Ten Commandments of Business Acquisitions has been so popular that we have decided to break it down. To briefly discuss each of the Ten Commandments, and its import and impact.
The Ninth Commandment: "Engage Yourself in the Negotiations"
Once you have agreed with the owner/seller on a purchase price, be careful that you do not just turn the transaction over to attorneys (or others) to structure and paper the deal.
Buying a business is a complicated and delicate process, and each acquisition requires attention to numerous logical steps in the process and related negotiation points. Be involved and stay involved.
A prospective buyer, as the operator of the business post closing and going forward, will have an outlook and business perspective that needs to be incorporated into the terms of the acquisition and the documents. A prospective buyer should therefore take time to carefully read all of the documents, and to understand them and any revisions to them as the negotiation proceeds.
Careful selection of the business attorney will make this process significantly easier. Legal counsel, informed as to the terms of the contemplated transaction, should document the transaction expeditiously and professionally to clearly and concisely reflect the agreed upon terms and conditions. Legal counsel should understand that his or her task/ assignment is to document the contemplated transaction in accordance with the agreed upon terms, and not to be a hero and renegotiate those terms. Effective legal counsel will understand the difference between material deal points that need to be negotiated and minutiae.
Get your legal counsel involved at the outset and continuously throughout the process. Important to involve seasoned legal counsel in preparation of the letter of intent and continuously thereafter.