Buying/selling your business

When preparing to purchase a business, a buyer should conduct a thorough investigation of the ‎target to confirm it is a sound investment and to understand the risks involved in the investment. ‎To this end, as part of due diligence, a buyer will seek to confirm the assets and liabilities of the ‎target, to gain information about the operations of the target business, and to identify any risks, ‎barriers or hurdles to the proposed purchase. ‎

To take a promising idea, or business, to the next level, a business typically needs to share its valuable ‎secrets with prospective strategic partners or investors. Signing an effective non-disclosure agreement can therefore be a critical step in developing a new business relationship or opportunity by ‎giving a growing business enough comfort to take that initial step. ‎

Letters of intent (“LOIs”), like term sheets, are essential documents in corporate transactions as they ‎outline the key parameters of a transaction so the parties can be on the same page before spending the ‎time and money to negotiate final legal agreements. Whereas term sheets tend to be used for raising ‎capital, LOIs are the preferred form for asset or share purchases, although both such documents have ‎essentially the same legal status as a guidance document with limited binding provisions.  ‎

Solicitors routinely provide opinions on a wide variety of issues, and legal opinions are an essential part ‎of many major transactions. In each instance, the solicitor involved is expected to provide an opinion ‎that is both legally correct and not misleading to the addressee. ‎

You have decided to purchase a private business in Canada. The first decision you will need to make as ‎a purchaser of a Canadian business is how to structure the transaction. One such structure is a share ‎purchase. ‎

The purchase and sale of a business is a process that involves many considerations. A fundamental ‎decision is whether to structure the transaction as a share purchase or an asset purchase. While each ‎transaction will have its own unique intricacies, this article will discuss ten key considerations that should ‎be taken into account when acquiring the assets of a Canadian business.‎

Although the ‎life cycle of a deal varies depending on the type of the transaction and the industry of the ‎target ‎business, many life cycle stages are similar.‎ Part 1 of the Life Cycle of a Deal series sets out the ‎types of acquisitions and the first five stages of a‎ deal's life cycle.‎

In Part 1 of the Life Cycle of a Deal series, we examined the types of acquisitions and the various stages ‎of a deal’s life cycle. As Part 2 of the Life Cycle of a Deal series, this article provides an overview of the ‎legal due diligence process of a prospective purchaser.‎

Parts 1 and 2 of the Life Cycle of a Deal series examined the preparatory steps of a transaction, ‎‎including the preparation of the business for sale, drafting of a non-disclosure agreement and letter of ‎intent, and then some key aspects of the due diligence process. Once the non-disclosure agreement and ‎letter of intent have been entered into, and often while the diligence is being completed, the next step is ‎the drafting of the definitive purchase agreement that outlines the terms and conditions ‎of the transaction. ‎

Selling your business is a lot like selling your house: it should have “curb appeal” and pass a buyer’s “home inspection” with flying colors. In this article, we look at some of the steps that you, as an owner-manager or officer/director ‎of an emerging company, can consider taking to get your business ready to sell. ‎In part two, we explore the key topics in due diligence and the questions that sellers must be prepared to answer from buyers.

When buyers consider purchasing your house, a key part of the process is a home inspection. In much the same way, when a buyer is preparing to purchase your business, they perform a version of home inspection – a process which includes, but is not limited to, reviewing all your corporate records and contracts and carrying out on-site visits to inspect key assets. To ensure you pass the “home inspection” with flying colors, you should conduct seller-side due diligence. 

The M&A Market Trends Subcommittee, Mergers & Acquisitions Committee of the American Bar ‎Association regularly conducts and publishes deal studies in respect of North American private M&A ‎transactions. This article focuses on the two most recently published studies: the ‎‎2019 Private Target M&A Deal Points Study and ‎the 2018 Canadian Private Target Mergers & Acquisitions Deal Point Study‎.‎