Parting with your business is often an emotional process that involves a lot. M&A lawyer Daphne van Boxtel knows all about it. She has been involved in many mergers and business acquisitions.
The moment you decide to sell (part of) your business, a lot comes up. Where do you start? According to Daphne van Boxtel, an M&A lawyer specialized in (international and national) mergers and acquisitions, it is advisable to look for a supporting party.
"It's really very useful to have good advisers. You often see with businesses that they have had the same advisers for years, but sell a business still involves a lot of expertise." she explains. "In addition, they often have a large network and see which parties fit together. Good advisers always pay off."
This 7DTV episode from the Dream Exits series was produced in collaboration with business acquisition specialist No Monkey Business.
Due diligence
Once two parties have expressed interest in each other, due diligence is done and Van Boxtel herself comes on the scene. Due diligence sounds more exciting than it actually is. After all, it means nothing more than the classic bookkeeping investigation: the company's condition is examined in detail.
When the due diligence comes from the buyer, he investigates various topics from a fiscal, financial, commercial and legal perspective, among others. This is where Van Boxtel comes in. She focuses on the legal book research. "All the closets open up to see if there are any dead bodies," she jokes in the interview. But rightly so, because you want and need to know who you are doing business with and whether the business has its affairs in order.
Due diligence is time-consuming and very labor-intensive for the entrepreneur. "You get a lot of questions and are expected to be able to answer them all," she says. "Make sure you have your affairs in order before you put your business up for sale because that speeds up the process. If you don't do this in time, it can become a very long and tedious process."
The purchase agreement
The shareholder purchase agreement: what should it actually contain? Not too much, if it is up to Van Boxtel. "I prefer the agreement to be as short as possible, but of course certain basic agreements must be made."
It will include the transfer of shares and also agreements on any guarantees for the buyer. In doing so, the selling entrepreneur, in turn, wants to include certain limitations of liability in the agreement. It is important for the seller that all risks are told, so that the buyer cannot make claims afterwards.
Lessons learned
With her years of experience as an M&A lawyer, Van Boxtel has learned a lot. Every transaction is different, but what are the most important lessons learned? "Actually, they are not even very legal. Often they are practical things like making sure you have good advisers on your side as an entrepreneur."
And by that she doesn't mean advisers who may have known and run your business for years: "Choose advisers who have experience with an exit process, for example, people who have done this more often or have themselves acted as financial investors before. That's not cheap, but it pays for itself."
