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Preparing for an Exit – Legal Aspects Presentation to Techcelerate, 29 April 2022 Stuart Scott-Goldstone, MA MBA Partner and Head of Corporate/Commercial Team Aaron & Partners LLP t: 07812 172567 e: stuart.scott-goldstone@aaronandpartners.com w: aaronandpartners.com Initial considerations • What are your objectives? • Realisation of investment, new role, new challenges or taking a break/retirement? • How important are you to the business? • Other investors’ requirements; how will stakeholders react? • ‘Drag’ and ‘tag along’ • Professional advice • Valuation, tax and corporate structure • Due diligence – ‘getting your house in order’ 2 Legal due diligence (1) • Who owns ‘your’ intellectual property? • Domain names and Social media accounts • Software and other IP licences • IT Systems • Borrowings and other financing • Company records and registers 3 Legal due diligence (2) • Customer and supplier contracts and key relationships • ‘Change of control’ clauses • Regulatory requirements, licensing • Employment and consultancy contracts, retention of staff • Minority shareholders • Exercise of share options • Data rooms • Confidentiality 4 What are a Buyer’s requirements (1)? • Likely acquisition objectives? • Type of Buyer • Type of Deal • Acquiring products, knowhow/IP, access to market, supply chain; remove competitor? • Do they need you? • Minority and unwilling shareholders • Due diligence 5 What are a Buyer’s requirements (2)? • Warranties and indemnities; who will give these? • Restrictive (non-compete) covenants; will these affect your future plans? • Non-cash ‘consideration’ and rollovers; or do you just want cash? • Deferred consideration and ‘earn outs’; or do you want everything on ‘day one’? • Put and call options; or do you want to sell all your shares now? • Listings / IPOs • Retention / removal of staff; incentives and termination payments • Repayment of borrowings, release of security 6 Chester Tel: 01244 405555 Shrewsbury Tel: 01743 443043 Manchester Tel: 0844 800 8346 Offices Aaronandpartners.com @AaronLegal
