Http://. Recruitment Company Sales – Legal Aspects Peter Savage 14 March 2012 From ‘Deal?’ to...
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http://www.morrlaw.com/ recruitment
Transcript of Http://. Recruitment Company Sales – Legal Aspects Peter Savage 14 March 2012 From ‘Deal?’ to...
http://www.morrlaw.com/recruitment
Recruitment Company Sales – Legal Aspects
Peter Savage14 March 2012
From ‘Deal?’ to ‘Done!’
CORPORATE
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
Overview1. Trade Sales as an Exit2. Acquisition Structuring 3. Funding4. Heads of Terms and Confidentiality5. Due Diligence6. Documentation7. Apportioning Risk: Warranties and Disclosure,
Indemnities and Tax8. Problem areas…
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
1. Trade Sales as an ExitAlternatives:
- MBO/Private Equity- Flotation- Family succession- Stagnation? Winding down?
Features:- 100% exit - Buyer funding - Strategic reasons for purchase in addition to financial
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
2. Acquisition StructuringSale of Shares:
- ‘Target’ company- Liabilities all transfer
Sale of Assets:- Name and assets only are
sold- Contracts (and contractors)
assigned- Employees- Third party consents
Distress Sales:- Opportunism- Risk and price- Know your bargaining
position
How to proceed:- Tax advice- Know your bargaining
position
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
3. FundingDebt and how to find it.
What are banks looking for?
What assets can secure a loan? Debtor book financing, personal or company property, future performance…
Personal guarantees
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
4. Heads of Terms
Non binding terms:• Price: earn out • Ongoing employment• Timetable
Legally binding terms:• Confidentiality• Exclusivity• Non-compete
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
5. Due Diligence
Commercial: Specific to your business and industry
Financial: Tax and Accounts
Legal: Everything else – contracts, litigation, personnel- Questionnaire and replies- Handling documents
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
6. Documentation Share purchase agreement:- Who pays what and when?- What is done on and after completion?- Who takes the risk if things go wrong?
Disclosure letter
Employment or consultancy agreements
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
7. Apportioning RiskWarranties:- verify due diligence - a price adjustment
Disclosure- Legal effect of disclosure- Disclosure letter and bundle
Limitations:- Financial and time limits- Control of claims
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
7. Apportioning Risk (2)Indemnities:- for specified matters and best avoided if possible- gives pound for pound payment for any loss incurred
Tax:- apportioned around the date on which the price is set - completion accounts or ‘last’ accounts- sellers pays prior to this date, buyer afterwards
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
8. Problem AreasMaintaining client and contractor relationships – effect of change of control
Protecting an earn out
Minority shareholders
Employee confidentiality and share schemes
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
RI Recruitment Industry M&A Conference From ‘Deal?’ to ‘Done!’
REDHILL | WOKING | WIMBLEDON | CAMBERLEY
9. Questions?
PETER SAVAGE, PARTNER, HEAD OF CORPORATE & COMMERCIAL AND HEAD OF RECRUITMENT - MORRISONS SOLICITORS LLP
http://www.morrlaw.com/recruitment
Recent Deal experience:• Advising award-winning IT and telecoms staffing business
E-Resourcing Limited on its recent acquisition of specialist SAP consulting firm Williams McKinley Limited
• Trade sale of Anystaff Recruitment Limited
• Sale of facilities management and recruitment provider to the food industry to Private Equity funded acquirer
• MBO of privately owned blue collar temporary requirement business
• Sale of recruitment process outsourcing specialist to a US acquirer
