A buoyant deals market is good news for all

By Pauline Rigby, head of corporate and restucturing, Forbes Solicitors.

The deals market within Lancashire remains buoyant, good news for all.

Our expectation is that 2018 should generally reflect 2017, with transactions continuing at a similar rate.

The dealsmarket is especially good for acquisitive buyers who are picking up some great deals whilst the market for sellers still remains a little unknown. Those who are acquisitive amongst us are generally making the most of the unknown market conditions and structuring good deals for sellers who, due to the unknown market conditions, are willing to accept either less consideration or a more fluid payment structure.

Our experience indicates that such buyers are not only based in the UK, but overseas, who generally have a plan for their acquisitions and will have specific businesses on their radar.

Sellers who are performing well within their sectors may be of the opinion that they are riding the crest of wave and therefore 2018 may see some more activity with sellers becoming increasingly concerned as to the effect of Brexit.

The deals process

Once the business has been effectively marketed for sale and the offer has been accepted, it is time for the parties to agree heads of terms. Whilst not legally binding in all respects, heads of terms are an exceptionally good tool for the parties to agree the specific terms and can have a positive effect on the smoothness of the transaction.

Once the principal terms have been agreed, the process of due diligence commences. Sellers should be organised and ready to deliver documentation and replies to enquiries as and when raised. A timely response can leave a positive impression on a buyer, again making for a smooth process during what can be a stressful part of the deal.

Once this stage has been completed the legal paperwork for the transaction will need to be put in place. It is important at this stage that the advisors are all experienced in corporate transactions and focus on the deal at hand agreed in the heads of terms.

It is also important for the buyers and sellers to continue to communicate effectively throughout the transaction, maintaining good relations as the majority of transactions involve the buyer and the seller working together in some capacity post completion.

A typical sale process can be anything from six to 16 weeks dependent upon the size and complexity of the deal, whether or not external funding is required, whether third party consents are required and how ready the seller is for the sale process itself.

The process is similar no matter how big or small the business is, though the issues may be more complex and have more administrative requirements on larger deals. Note that public company sales are entirely different and governed by very different rules and specialist PLC advisors would be required for a deal of that nature.