Dealing with the seller

Dealing with the seller

 

Once all the necessary information has been analyzed and communicated to the buyer and the seller, then both the parties can understand the range of possible valuation for the seller company.

If after all this the seller is interested in the acquisition process then the lawyers, accountants, management and the advisors will draft a Letter of Intent (LOI) and present it to the seller. The LOI describes various provisions that will explain the basic structure of the process. Other than a variety of clauses, the LOI will have

• A contemplated purchase price
• The debt and equity structure of the transaction
• Involvement of stock or asset purchase
• Taxation details
• The assumed liabilities and legal risks
• Changes in the management after the acquisition and 
• The method of transferring of fund while closing the deal. 
• Handling of the real estate
• Working capital levels at the closing date
• A tentative date for closing the deal.

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